Annual Report 2013 - Ooredoo · Ooredoo Annual Report 2013 3. Chairman’s Message Dear Shareholders, Our industry is going through a period of rapid change and evolution. The digital

Annual Report 2013

In the Name of Allah Most Gracious Most Merciful

His Highness Sheikh Tamim Bin Hamad Al Thani, Emir of the State of Qatar

3 Introducing Ooredoo4 Chairman’s Message8 Group CEO’s Message10 Our Board of Directors12 Operational and

Financial Highlights 14 Our Reach16 Our Strategy17 Awards and Industry

Recognition in 201318 Key Moments from 2013

23 Our Businesses24 Ooredoo Qatar28 Indosat in Indonesia30 Wataniya Kuwait32 Nawras in Oman34 Asiacell in Iraq36 Ooredoo Algeria 38 Ooredoo Tunisiana in Tunisia40 Wataniya Mobile Palestine42 Ooredoo Maldives44 Ooredoo Myanmar46 wi-tribe, Asia Mobile Holdings,

and Other Investments49 Our Social Responsibility55 Corporate Governance Report67 Financial Review

71 Consolidated Financial Statements73 Independent Auditors’ Report74 Consolidated Statement of

Profit or Loss75 Consolidated Statement of

Comprehensive Income76 Consolidated Statement of

Financial Position78 Consolidated Statement of

Cash Flows80 Consolidated Statement of

Changes in Equity82 Notes to the Consolidated Financial Statements

Contents

Ooredoo Myanmar is the Group’s newest operation, having won an intensely-competitive telecommunications licence bid in June, 2013. Myanmar is considered one of the world’s highest potential telecom markets.

Introducing Ooredoo

“Everybody has the aspiration to grow, develop and live better lives. We want to deploy our resources to help people realise their ambitions. That is why we chose to become ‘Ooredoo’ – we enable our customers to achieve the things they want in their lives.

Our name reflects the aspirations of our customers and our core belief that what we do enriches people’s lives: by connecting them with education and employment opportunities; by enabling them to stay in touch with friends and families; and by providing them with the tools for a better tomorrow.”

An excerpt from the speech of H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani, Chairman of the Ooredoo Board, at the launch of the Ooredoo brand in Barcelona on 25 February 2013.

Our vision is to enrich people’s lives as a leading international communications company.

Ooredoo Annual Report 2013 3

Chairman’s Message

Dear Shareholders,

Our industry is going through a period of rapid change and evolution. The digital era is transforming the way people use communication, and expanding the impact that technology has on our working and everyday lives. Being able to stay ahead of this wave of development is the defining factor for companies like ours. We will need to change faster than our industry is changing.

4

I am proud to say that Ooredoo has embraced this challenge with more determination than many of our regional and global peers. We have pursued a clear-sighted strategy of transformation, which – as this report will highlight – is already delivering robust returns for our stakeholders, and which has enabled us to enhance our offering in key markets across the Middle East, North Africa, and Asia.

Last year’s annual report was one of the first public documents to showcase our new Ooredoo brand. Over the course of the last year, we have brought the vision for the brand to life, expanding on our promise to support all elements of human growth throughout our markets. Our products and services have evolved, our networks have been enhanced, and we have brought a series of key initiatives to life in support of employment, education, women’s access to mobile services, and entrepreneurship.

2013 was a record-setting year. Emboldened by our new brand, and working together as one company, we have maintained strong results in our core markets; launched new and vital services across our footprint, including historic 3G and 4G service roll-outs; and started a new chapter in Myanmar, our newest market and one that offers incredible potential for growth.

A record-setting year Since 2006, Ooredoo has been the fastest-growing communications company by revenue in the world. We continued to set the pace for the industry in 2013, recording another year of revenue growth.

Our consolidated revenue increased by 1 percent to QR 33.9 billion (FY2012: QR 33.5 billion), while net profit attributable to Ooredoo shareholders went down by 12.5 percent to QR 2.6 billion (FY 2012: QR 2.9 billion).

Normalised FY2013 net profit attributable to Ooredoo shareholders (excluding currency loss, one-off tower sale gain in Indosat and start-up cost in Myanmar) stood at QR 3.3 billion, a 16 percent increase over FY2012.

Across our footprint in the Middle East, North Africa, and Southeast Asia, we serve 95.9 million consolidated customers.

Becoming “Ooredoo” – achievements of 2013 Transforming our company into Ooredoo was always about much more than simply changing our name. The transformation process was about taking our company to the next level – bringing our strategy to life with a new, dynamic brand and leveraging our combined resources to transform our customer offering.

Throughout 2013, we have delivered on this promise for our stakeholders.

The rebranding process started in earnest with our flagship market of Qatar in March 2013. A major ceremony in Doha was followed by an intensive campaign aimed at explaining our strategy for our customers, and helping them understand how the new brand would enrich their lives and support Qatar’s National Strategy 2030, by contributing to education and development.

Rebranding in Qatar was followed by Tunisia, Algeria, and the Maldives, so that in one year we had successfully rebranded operations in the Middle East, North Africa, and Asia. We will continue to rebrand across our footprint throughout 2014, aiming to offer a united, global brand by the end of the year.

Each of the Ooredoo launches was matched by a parallel investment in major service enhancements and improvements. We wanted our customers to feel an immediate difference in the standard of services provided by Ooredoo, both in the quality of customer experience and in the quality of the network provided.

In Qatar in 2013, we saw the launch of commercial 4G services and the continued roll-out of nationwide Ooredoo Fibre services. We launched 4G services in Kuwait, Oman and the Maldives, and were proud to launch 3G services in Tunisia and Algeria during the year.

Other markets also saw important service upgrades as a result of our network enhancement strategy. Nawras in Oman delivered a major upgrade for its 3G+ network. Indosat became Indonesia’s first communications company to operate a UMTS 900MHz network to deliver a better customer experience and conduct more cost-efficient operations.


Chairman’s Message continued

Our philosophy has been to ensure that the full technological and human resources are in place in every market, so that we are ready to upgrade our network as soon as regulatory approval is received and the market is ready for us to launch.

For our customers, these upgrades deliver faster internet speeds, the capacity to upload and download files more easily, and a better online experience. For our shareholders, this programme of enhancements provides the reassurance that Ooredoo is investing wisely to stay ahead of customer demand for data services, which we believe is the business of the future.

Supporting our international expansion Throughout this process of transforming our existing operations, we have continued to deliver on our strategy of evaluating opportunities as they arise within our footprint, and pursuing those we believe will add the greatest value to our portfolio.

In 2013, Myanmar became our newest market, when we defeated international competition to be awarded one of only two commercial network licences. In a challenging yet high-potential market, we are dedicated to providing a full slate of mobile communications services to improve the daily lives of Myanmar consumers and help businesses run more efficiently. Before we entered the market, there was a telecom services penetration rate of 12 percent for a population of more than 65 million people. Fewer than 400,000 had internet access. This lack of access has placed real barriers to economic development, industrial diversification, education, and social growth.

We are committed to investing in Myanmar and strongly contributing to the development of the country. For example, we intend to build tele-centres across the country to provide internet connectivity, and guarantee to offer at least one free internet access point for every public primary and secondary school and university. Such is our confidence that we can make a genuine difference, we have announced our intention to launch with 3G services, offering the people the opportunity to go online via their mobile for the first time in their lives.

Providing a firm foundation for our ambitions both at home and abroad, we continued to pursue a prudent yet far-reaching financial strategy. In 2013, we successfully issued dual tranche 15-year and 30-year bonds of USD 500 million each, secured a four-year USD 1 billion revolving credit facility, and issued our first-ever Sukuk of USD 1.25 billion with a tenure of five years. Demonstrating the strong outlook for our operations, Asiacell in Iraq posted the Middle East’s largest IPO since 2008 during 2013.

A successful year of awardsThe wider communications industry has noted our success, and celebrated Ooredoo’s progress with a string of major international awards during the year. Indeed, 2013 has been the best year for awards and recognition in the company’s history, both at a Group level and for our national operations. We have won more awards than ever before, and these awards have been more prestigious and more global than ever before.

It was fitting that we finished the year with perhaps our most significant award, being named “Best Mobile Operator of the Year” at the Annual World Communication Awards. Previous winners of this award include some of the industry’s biggest international operators, reflecting our success in taking a small national operator and building it into a truly global force.

It is a source of great pride for the whole company that we have won awards for our leading “Human Growth” initiatives during the year. “Najjani Employment,” our mobile service to help the young unemployed in Tunisia, and Asiacell’s “Almas” (“Diamond”) service for women in Iraq were both recognised at global award ceremonies.

Beyond these awards, the range of honours received by Ooredoo demonstrate the extent to which every part of our company came together and worked harder in 2013.

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Our brand launch was recognised by the International Business Awards; our Nojoom loyalty programme was a winner at the Loyalty Awards; Indosat received prizes for customer service and for its network programme; our investor relations team was named as the best in the region; Nawras received a Cannes Lion for its use of digital media… the list goes on.

Of course, we could not have achieved these awards without the hard work, dedication and commitment of our people. These awards are a true celebration of the spirit of teamwork and togetherness that we see every day at Ooredoo.

DividendsThe Board of Directors is pleased to recommend to the General Assembly the distribution of a cash dividend of 40 percent of the nominal share value (QR 4), based on our continued growth and future investment.

Finally, I would like to acknowledge my sincere appreciation to His Highness Sheikh Tamim Bin Hamad Al Thani, the Emir of the State of Qatar, for his instrumental guidance, and for the support of the people and leadership of Qatar, which has enabled our growth at home and abroad as a proud Qatari company.

The Board has been essential in enabling us to set and reach our goals, and I would like to thank the members for their contributions and direction.

This was a year when we faced the challenges of our industry, and delivered an impressive response. This was the year when we transformed our operations, and delivered more and better for our customers. This was truly the year that we lived up to the values of our new Ooredoo brand.

Abdullah Bin Mohammed Bin Saud Al ThaniChairman

4 March 2014

Our consolidated revenue increased by 1 percent to QR 33.9 billion (FY2012: QR 33.5 billion).

QR 33.9 billion

The Board is pleased to recommend the distribution of a cash dividend of 40 percent of the nominal share value.

40 percent

We launched 4G services in Qatar, Kuwait, Oman, and the Maldives, and were proud to launch 3G services in Tunisia and Algeria during the year.

4G


Group CEO’s Message

Ooredoo brand launch creates significant benefits Since the launch of our global brand one year ago, we have successfully launched Ooredoo in Qatar, Tunisia, Algeria and the Maldives, and are establishing the brand in Myanmar to support our new operations there. We are ready to roll-out the Ooredoo brand across most of our footprint throughout 2014.

The launch of the Ooredoo brand has delivered a positive impact for our business, our customers, and for our employees’ engagement. In Qatar, where we launched first, brand recognition and brand equity are now the highest in our history. Our recent employee engagement survey shows that 85 percent of employees feel excited about the new brand. We see similarly positive results in Tunisia, Algeria and the Maldives, and are confident that the next operations to launch the brand will enjoy a similar boost to external and internal sentiment.

Focusing on data Our brand launches were enhanced by parallel network upgrade programmes and new service launches. For example, in Qatar we saw the launch of commercial 4G mobile internet in the weeks following the Ooredoo reveal, while Ooredoo Algeria’s brand roll-out was complemented by the launch of 3G services. The popular public reaction to these initiatives boosted our customers’ feelings about our new brand.

Building our data capabilities is central to our long-term vision for the company. We have known for a long time that traditional voice and SMS services are likely to come under pressure from alternatives in the market, and that data will play an increasingly important role in our business. I’m pleased to report that, in 2013, this focus on data is showing positive returns for the company.

Dear Shareholders,

As the Chairman outlined, 2013 was a transformative year for Ooredoo. In every aspect of our operations, we are more united, more focused and more productive, delivering enhanced results for our customers and shareholders.

Our success has come in large part from the shared vision that unites everyone in Ooredoo. From North Africa to Southeast Asia, we understand that mobile technology and internet access are key contributors to human growth. We are striving to help our customers achieve their hopes and aspirations.

I would like to outline some of the areas where our company has made significant progress, and share with you how we are positioning Ooredoo for the future, so that we can continue to deliver strong returns for our shareholders.

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Data access is now the single largest contributor to revenue growth, with significant year-on-year revenue growth across the Group. This is particularly important because – in contrast to more mature markets – there is room for growth across our footprint due to the comparatively low broadband and data penetration.

In Indonesia, for example, Indosat has increased data penetration across its customer base to 46 percent, and increased data revenue by 37 percent, driven by new data bundles and a better customer experience. In Qatar, Ooredoo is the data market leader, with 26 percent year-on-year data revenue growth and 80 percent mobile broadband penetration in 2013.

Even in markets like these, where we hold a leadership position, we still see significant potential for growth. We intend to be a leader in data market share across our footprint, and we have set ourselves the target of maintaining significant year-on-year data revenue growth in the years ahead. We will drive data market expansion through enhanced networks, new services and data packages, and partnerships that will make affordable smartphones available for all.

New business-to-business opportunities We also see major opportunities in the business-to-business sector, as a driver of economic growth. Given the dynamism of our markets, and the emergence of a rising class of small and medium enterprises, we believe we have access to significant untapped potential.

Ooredoo has invested significantly in enhancing the human and technological resources available to our business customers. Over the course of 2013, we have established a comprehensive B2B programme, including an enhanced product portfolio, world-class channels, and an increased range of enterprise solutions.

We are working to ensure that B2B services will represent an increasing proportion of Ooredoo revenue in the months and years ahead. We believe we are well-placed to achieve this goal.

Bringing our new brand to lifeWe developed the Ooredoo brand to reflect the aspirations of our customers. They are young, digitally-aware, and passionate about technology. They are ambitious and aspirational, actively pursuing a better life for themselves and their families. Ooredoo is a brand that matches these ambitions.

Now that we have established the brand internationally, and are well on the way to launching it in each market, we are in a strong position to leverage our capabilities and meet the needs of our customers. Our customers are looking to us to deliver new services, and to provide the networks they require to fully participate in the new digital world.

With our strategy in place, and our new brand extending across all our operations, we are very confident that we will see new opportunities for growth in the future.

I would like to thank the Board for its support of the major transformation efforts of the last year. I would also like to thank our shareholders, for the trust they have placed in the company and their continued support as we continue to evolve and develop.

Dr. Nasser MarafihGroup Chief Executive Officer

4 March 2014

Our recent employee engagement survey shows that 85 percent of employees feel excited about the new brand.

85 percent95.9 million

Across our footprint, we now serve 95.9 million consolidated customers.

74% MENA25% Asia Pacific1% Subcontinent

External revenue by region, 2013


H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani

Hareb Masoud Al Darmaki Nasser Rashid Al-Humaidi

H.E. Ali Shareef Al Emadi H.E. Mohammed Bin Issa Al Mohannadi

Turki Mohammed Al Khater

Aziz Aluthman Fakhroo Hamad Saeed Al Badi

Omer Abdulaziz Al-Hamed Al-Marwani

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Our Board of Directors

H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani ChairmanOoredoo’s Chairman of the Board of Directors since July 2000, His Excellency has held several high profile positions in Qatar, including the Chief of the Royal Court (Amiri Diwan) from 2000 to 2005. He has a diverse background in both the Military and Aviation fields, and was previously a Member of the Planning Council in Qatar. He currently sits on the Board of a number of leading telecommunications companies around the world. His Excellency’s wide experience in and knowledge of the fields of administration and government enrich the Board considerably.

H.E. Ali Shareef Al EmadiDeputy Chairman H.E. Mr. Al Emadi, who is the Minister of Finance for the State of Qatar, joined Ooredoo’s Board of Directors in March 1999. He has held leadership positions at a number of key Qatari institutions, including his service as the Secretary-General of the Supreme Council for Economic Affairs and Investment, a member of the Supreme Committee for Delivery and Legacy, a Board member and Head of the Investment Committee at Qatar Investment Authority, and Chairman of the Board for QNB Group. Furthermore, he has a long experience in the banking sector in his service as the QNB Group CEO from 2005 to 2013. H.E. Mr. Ali Shareef Al Emadi brings significant experience and knowledge in the fields of finance and banking to Ooredoo.

H.E. Mohammed Bin Issa Al MohannadiMemberHis Excellency joined the Board in July 2000. He currently serves on the Boards of a number of Qatari companies and has held many prominent positions, including previous roles as Chief Financial Officer of the Royal Court (Amiri Diwan) and State Minister. His Excellency’s considerable experience in and knowledge of administration, finance and government are greatly beneficial to the Board.

Turki Mohammed Al KhaterMember Mr. Al Khater, who joined the Board in 2011, is the President of General Retirement and Social Insurance Authority, Chairman of Dlala Holding, Board Member of Masraf Al Rayan, and a Board Member of Al Ahli United Bank in Bahrain. He has previously held the positions of Undersecretary of the Ministry of Public Health and Managing Director of Hamad Medical Corporation, and brings significant experience in business and finance to the Board.

Hareb Masoud Al DarmakiMemberMr. Al Darmaki joined the Board in March 1999. He is currently the Executive Director of Private Equity, Abu Dhabi Investment Authority; and a Board Member of several leading financial institutions in the United Arab Emirates. His strengths in the fields of economics, investment, and finance greatly augment the insights of the Board.

Nasser Rashid Al-HumaidiMemberMr. Nasser Rashid Al-Humaidi, who joined the Board in 2011, is Executive Director – Operations & Support of Qatar Development Bank and IT Director of Qatari Diar. Prior to his current positions, he led various management and business technologies roles in multi- industries sectors including utilities, telecom, oil & gas, real estate and banking; and contributed to national steering committees. This diverse background brings a wealth of experience that will contribute significantly to the Ooredoo Board.

Omer Abdulaziz Al-Hamed Al-MarwaniMemberSince joining the Qatar Investment Authority in 2006, Mr. Al-Marwani has served as Director of the Finance Affairs Department, and has been Acting COO since November 2012. Concurrently, Al-Marwani has served as Director of the Finance and Administration Affairs Department at the Supreme Council for Economic Affairs and Investments since 2003. He joined the Ooredoo Board in 2013.

Aziz Aluthman FakhrooMemberMr. Aziz Aluthman, who joined the Board in 2011, is an Associate Director in the Mergers and Acquisitions Department of Qatar Holding LLC, the strategic and direct investments arm of the Qatar Investment Authority, where he has been instrumental in the execution of key investments. He was previously founder and CEO of Idealys, and currently represents Qatar Holding on the Boards of United Arab Shipping Company and Knowledge Universe. He brings a strong business background and deep understanding of technology to the Board.

Hamad Saeed Al BadiMemberMr. Al Badi joined the Board in March 2007. He holds the position of Assistant Director, International Equities, Abu Dhabi Investment Authority, and is a noted expert in the fields of finance and investment.


Operational and Financial Highlights

Ooredoo showed a solid consolidated performance throughout 2013.

Consolidated revenue increased by 1 percent to QR 33.9 billion, while net profit attributable to Ooredoo shareholders went down by 12.5 percent to QR 2.6 billion. Normalised FY2013 net profit attributable to Ooredoo shareholders, excluding currency loss, one-off tower sale gain in Indosat and start-up costs in Myanmar, stood at QR 3.3 billion, a 16 percent increase over FY2012.

In total, Ooredoo had 95.9 million consolidated customers by the year-end.

A key initiative was the roll-out of the new Ooredoo brand, first globally in February 2013, followed by Qatar, Algeria, Tunisia, and the Maldives.

Ooredoo was awarded a commercial licence for Myanmar during 2013, providing the company with access to an exciting new market with significant potential for growth.

Ooredoo became the first company to provide 4G services in three GCC markets – Qatar, Kuwait, and Oman – and launched 4G services in the Maldives. The company’s network enhancement strategy also delivered significant network upgrades in Indonesia, and supported the launch of 3G services in Tunisia and Algeria.

The company’s focus on data services delivered a strong return during 2013, with data becoming the single largest contributor to revenue growth.

To support its long-term vision, Ooredoo issued dual tranche 15-year and 30-year bonds of USD 500 million each, secured a four-year USD 1 billion revolving credit facility, and issued its first-ever Sukuk of USD 1.25 billion with a tenure of five years. In addition, Asiacell in Iraq posted the Middle East’s largest IPO since 2008 during the year.

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QR 4.00 QR 9.3 billion

QR 33.9 billion QR 14.6 billion QR 2.6 billion

Earnings per shareAmount in QR (Note A)

Cash dividends and bonus per shareAmount in QR (Note B)

Capital expenditureAmount in QR millions (Note C)

RevenueAmount in QR millions

EBITDA Amount in QR millions

Net profit attributable to Ooredoo shareholders Amount in QR millions

QR 8.05

Note A Earnings per share have been adjusted as a result of the issuance of bonus shares in 2011 and 2012, and the right issue in 2012.Note B 2013, recommended.Note C Capital expenditure does not include intangibles.

33,4

76

31,7

45

27,3

77

24,0

25

33,8

51

2009

2010

2011

2012

2013

2,94

7

2,60

62,88

8

2,82

5

2,57

9

2009

2010

2011

2012

2013

15,5

67

14,7

96

12,4

65

11,2

31

14,6

40

2009

2010

2011

2012

2013

19.2

6

8.05

2009

2010

2011

2012

2013

9.90

9.89

9,29

8

2009

2010

2011

2012

2013

7,31

6

6,57

5

6,94

2

8,39

3

4.00

2009

2010

2011

2012

2013

5.00

3.00

Bonu

s 30

%

5.00

Bonu

s 20

%

7.00

16.4

1

47%

47%

47%

43%46

%

EBITDA margin

Capital expenditure/Revenue

22%

21%26

%35%

27%

13Ooredoo Annual Report 2013

Our Reach

Algeria

Tunisia

Palestine Iraq

Kuwait

Qatar

Oman

The Maldives

Pakistan

Ooredoo is an international telecommunications company with headquarters in Qatar, and a consolidated global customer base of more than 95.9 million people as of 31 December 2013. It operates networks in Asia, Africa, and the Middle East.

QatarOoredoo effective stake 100%Country population 1.9 mMobile penetration 182%Market share 67%

The MaldivesOoredoo effective stake 92.1%Country population 0.3 mMobile penetration 133%Market share 36%

KuwaitOoredoo effective stake 92.1%Country population 3.9 mMobile penetration 168%Market share 30%

PalestineOoredoo effective stake 44.6%Country population 4.4 mMobile penetration 81%Market share 28%

TunisiaOoredoo effective stake 84.1%Country population 10.9 mMobile penetration 126%Market share 53%

IndonesiaOoredoo effective stake 65.0%Country population 248 mMobile penetration 121%Market share 20%

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Indonesia

Singapore

Laos

The Philippines

Myanmar

AlgeriaOoredoo effective stake 74.4%Country population 38 mMobile penetration 71%Market share 32%

MyanmarOoredoo effective stake 100%Country population 65 m

Operation to be launched in 2014.

IraqOoredoo effective stake 64.1%Country population 34.8 mMobile penetration 90%Market share 34%

OmanOoredoo effective stake 55.0%Country population 3.2 mMobile penetration 143%Market share 41%

Singapore (Starhub)Ooredoo effective stake 14.1%Country population 5.3 m

PakistanOoredoo effective stake 86.1%Country population 182.6 mWiMax customers 200 k

The PhilippinesOoredoo effective stake 40.0%Country population 97.5 mWiMax customers 48 k

Laos (LTC)Ooredoo effective stake 6.0%Country population 6.6 m


Our Strategy

We recognise that our industry is changing, and are prepared to face the challenges and seize the opportunities this change is creating. Our vision and the effectiveness of our performance have made us a telecommunications industry leader in terms of size, pace of growth and results, as well as market value and shareholder returns.

As we continue to grow, our ambition remains to be a leading international communications company. We also need to stay close to our customers in each market, retaining our local touch while growing globally, and ensuring that we are a community company with a drive to make a difference in the communities we work and live in.

There are three key pillars to this approach:

Differentiate on customer experienceWe know our customers and they know us. We are constantly improving customer support and service, along with enhancing our understanding of customer expectations in order to meet their needs. We are engaging on the frontline to truly understand the communities in which we work. A vibrant customer-centric culture exists at every level of the organisation, and we’re building that culture every day.

Strengthen our foundationsA stronger foundation gives us more confidence for future momentum, whether we are evolving as a business or planting the seeds for future success stories. We are focused on improving productivity and operational excellence – both in our day-to-day operations and in our capital investments.

It goes without saying that the engine that makes all of this happen is our people. We need to keep them happy, and are proud to maintain our reputation as an employer of choice.

Invest in new growthOoredoo’s mission is reliant on pioneering revenue models that revolve around a new breed of telecommunication services. Our blueprint for progress includes raising the bar for mobility services, broadband solutions, digital futures and fibre technologies, and laying the groundwork for continuous improvement at every turn.

But our investment strategy is not just limited to necessary incremental tweaks, operational infrastructure ramp-ups, or business as usual. Our aim is to also innovate and introduce cutting-edge services that shake up the norm in areas like enterprise, finance services, entertainment, and education.

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Awards and Industry Recognition in 2013

Our people have worked hard this year, and their dedication and commitment has been recognised by a string of national and international awards, culminating in Ooredoo being named “Best Mobile Operator” at the 15th Annual World Communication Awards. Ooredoo and its companies have received a string of prestigious industry accolades from across the globe. Here are some of the highlights:

Telecom Review Leader Merit Awards

Nawras

Global Mobile Awards Asiacell, Almas Line: Best Mobile Product or Service for Women in Emerging Markets

Arabian Business Dr. Nasser Marafih: The 500 Most Powerful Arabs in the World

TMT Finance Middle East Awards Ooredoo: Best Mobile OperatorAsiacell: Equity Capital Market Deal of the Year (IPO 2013)

Insights Middle East Call Centre Awards 2013

Ooredoo Qatar: Best Customer Retention Programme

EMEA Finance Ooredoo: Borrower of the YearOoredoo: Best M&A Deal of the Year

Loyalty Awards Ooredoo Qatar: Loyalty Programme of the Year – Middle East and Africa

Global Telecom Business Innovation Awards (GTB)

Indosat: Wireless Network InfrastructureTunisiana: Wireless Network InfrastructureIndosat (Usaha Wanita): Consumer Service Innovation AwardTunisiana (Naja7ni): Consumer Service Innovation Award

Cannes Lions Awards Nawras: Best Use of Digital Media Nawras: Commercial Public Services

Arabian Business Qatar Ooredoo Qatar: Best Communications Company

Global Telecom Business Dr. Nasser Marafih: Power 100

Telecoms World Middle East Awards

Indosat: Best International Growth StrategyNawras: Best Operator Network

International Business Awards Ooredoo: Gold Award for Best Brand Experience Event.Ooredoo: Silver Award for Best Exhibition Display Tunisiana: Silver Award for Best New Product or Service of the Year – Telecommunications

Middle East Investor Relations Society Awards

Ooredoo: Leading Corporate for Investor Relations Qatar Ooredoo: Best Investor Relations Team for Corporate Access Middle East Ooredoo: Best Investor Relations Website Middle East

CommsMEA Awards 2013 Ooredoo: Best Marketing Campaign of the Year Tunisiana: Best CSR Initiative

15th Annual World Communication Awards

Ooredoo: Best Mobile Operator of the Year

Institute of Chartered Accountants in England and Wales (ICAEW) Middle East Accountancy and Finance Excellence Awards

Ooredoo: Best Finance Team of the Year


JanuaryOoredoo successfully prices USD 1 billion bond transactionsOoredoo successfully priced USD 1 billion worth of senior unsecured notes in January 2013. These included USD 500 million in 15-year notes, due in 2028; and USD 500 million in 30-year notes, due in 2043. The net proceeds from the sale of the notes was used for Ooredoo’s general corporate purposes, including refinancing existing indebtedness.

FebruaryOoredoo unifies companies under new brandAt the GSMA Mobile World Congress in Barcelona, Ooredoo Chairman H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani announced that all operating companies would unify under the new brand throughout 2013 and 2014, and named international football star Lionel Messi as Global Brand Ambassador. In March 2013, the flagship market of Qatar became the first operation to rebrand as Ooredoo.

Asiacell completes Middle East’s largest IPO in five yearsIn the largest IPO in the Middle East since 2008, Asiacell successfully completed its initial share offering, raising USD 1.27 billion in February 2013. It now trades on the Iraq Stock Exchange under the ticker “TASC.” Ooredoo also increased its shareholding in Asiacell from 53.9 to 64.1 percent.

AprilOoredoo and CommScope launch industry leading factory-assembled tower topsIn a major technology development for the mobile industry, Ooredoo and CommScope launched a new approach to building wireless networks, aiming to improve installation quality and network performance and reduce deployment time. The world’s first factory-assembled tower tops for base station remote radios are pre-assembled according to a single global design standard.

Ooredoo becomes GCC’s leading provider of 4G servicesOoredoo Qatar officially launched Qatar’s first 4G LTE network in April, and rolled-out coverage zone-by-zone throughout 2013 with the goal of covering all inhabited areas of Qatar by 2014. They joined Nawras, which launched Oman’s first 4G LTE network in February 2013, and were followed by Wataniya Kuwait later in the year, making Ooredoo the first company to offer 4G services in three countries in the GCC.

MarchWataniya Telecom appoints new CEOWataniya Telecom appointed Abdulaziz Fakhroo as the new CEO, leading the company into an exciting new phase of development. Later in July 2013, Wataniya launched the ultrafast 4G LTE network in Kuwait, and rolled-out 4G coverage throughout the country.

Ooredoo AGM approves distributing 50 percent dividendOoredoo’s Annual General Meeting (AGM) approved the distribution of a cash dividend of 50 percent of the nominal share value (QR 5 per share), as the company posted a 6.2 percent increase in consolidated revenue from QR 31.8 billion in 2011 to QR 33.7 billion in 2012. The AGM gave official approval for the change of the company’s name to Ooredoo Q.S.C.

Key Moments from 2013

2013 was a landmark year for Ooredoo. As the Group transformed its identity, every one of its operating companies worked hard to reach out to customers, and to care, connect and challenge them with a broad range of activities.

18

MayMessi and Ooredoo team up on children’s healthOoredoo and the Leo Messi Foundation announced a trailblazing new initiative to support mobile health clinics around the world, with the goal of providing medical aid for two million children across Ooredoo’s footprint in the Middle East, North Africa, and Southeast Asia by 2016. Ooredoo announced plans to enhance its mobile health clinic services in Indonesia and expand its wide range of mHealth services across its footprint. It was followed in July by “Play for Dreams,” an online initiative to encourage young people to share their aspirations and ambitions.

JulyBusiness Fibre launches in some of Ooredoo’s key marketsOoredoo launched its Business Fibre broadband services in key markets including Qatar, Indonesia, Oman, and Tunisia, providing small and medium-sized businesses with fast and reliable internet connections. Ooredoo’s investment in fibre has proved to be a strong asset for the company, with Qatar delivering the world’s fastest rollout according to a global study based on figures from the FTTH Council.

SeptemberOoredoo sponsors Paris Saint-Germain Ooredoo announced the sponsorship of the 2012/2013 Ligue 1 football champions Paris Saint-Germain. As part of the partnership, which will run through 2018, Ooredoo and Paris Saint-Germain pledged to launch a community coaching programme across Ooredoo’s key markets, to create opportunities for young people in underserved communities.

JuneOoredoo announced as one of the winners of commercial licence for Myanmar Ooredoo won one of two mobile network licences in its newest market of Myanmar, where the company is set to launch a next- generation 3G network in 2014 that will deliver mobile and internet connectivity for millions of customers for the first time. Ooredoo Myanmar will also offer a wide range of mobile communications services to improve daily life and help businesses run more efficiently – including mobile money, mHealth, and mAgriculture.


SeptemberTunisia: Second market to adopt Ooredoo brandTunisia became the second of Ooredoo’s markets to adopt the Ooredoo brand as “Tunisiana Ooredoo,” and celebrated by announcing a sponsorship agreement with four of Tunisia’s top football teams. The sponsorship is the first time that Ooredoo will use its logo across all elements of a major sponsorship programme in North Africa.

Cherie Blair Foundation for Women and Ooredoo Myanmar to train 30,000 womenOoredoo Myanmar and the Cherie Blair Foundation for Women announced an innovative new partnership with organisations in Myanmar to train 30,000 women to become mobile retail agents by 2016, extending the benefits of mobile technology to underserved communities and supporting women’s entrepreneurship in Myanmar.

Indosat launches UMTS 900 MHz networkIndosat became the first company in Indonesia to launch the new UMTS 900 MHz network, providing a faster and modernised internet experience for its customers, and increasing the cost effectiveness of its operations. The UMTS 900 MHz network was launched in the tourist hub of Bali, and will roll-out in Greater Jakarta and additional major cities on the island of Java.

OctoberNew CEOs in Myanmar, Iraq and OmanDriving an enhanced customer experience, Ooredoo announced appointments for new CEOs in three of its operations in October. Ross Cormack, former CEO of Nawras in Oman, was appointed to lead Ooredoo Myanmar; Greg Young took on the CEO role at Nawras; and Asiacell in Iraq selected Amer Al Sunna as its new CEO.

Ooredoo to organise ITU Telecom World 2014 in QatarIn October, it was announced that Ooredoo will organise the prestigious ITU Telecom World 2014 on behalf of the State of Qatar, the host country. The event will provide an incredible opportunity to showcase a diverse range of Ooredoo services to an international audience.

NovemberOne million Mobile Money customers across footprintOoredoo passed the milestone of serving more than one million Ooredoo Mobile Money customers across its footprint in November 2013, enhancing the lives of people and contributing to economic and social development. The service, which enables customers to use their mobile phone to access financial services, is available in Qatar, Indonesia and Tunisia.

Key Moments from 2013 continued

20

Algeria sees launch of Ooredoo brand and 3G servicesNedjma, the Algerian operation, adopted the new Ooredoo brand in November 2013. To deliver a better customer experience, Ooredoo launched Algeria’s first commercial 3G mobile broadband network in December 2013, opening the network to the public within hours of receiving the regulatory green light.

DecemberOoredoo successfully closes first USD 1.25 billion Sukuk issuanceOoredoo successfully closed its first issuance of Sukuk, worth USD 1.25 billion, which will mature in 2018. This was Ooredoo’s first-ever Islamic bond and the first Sukuk issued globally in USD, using an innovative structure.

Maldives adopts Ooredoo brand and launches 4GThe Maldives operation became the first in Asia to adopt the Ooredoo brand, using the opportunity to enhance its connection with customers and showcase consumer and business services. In parallel, following an introductory phase in April 2013, Ooredoo Maldives launched the country’s first ever 4G LTE network.

By the close of 2013, the Ooredoo brand is live and serving customers in the Middle East, North Africa, and Asia – an incredible achievement in just 11 months


OurBusinesses

Ooredoo Qatar

2,39

2

2,40

4

2,53

0 2,86

5

2,37

6

Ownership Ooredoo in Qatar is 100 percent owned and managed by Ooredoo (Ooredoo Q.S.C.).

19%Revenue

3%Customers

22%EBITDA

8%Capex

Operator importance to GroupTotal customers(thousands)

Financial performance

2009 2010 2011 2012 2013

Revenue QRm 5,686 5,597 5,704 6,220 6,590

EBITDA QRm 3,296 2,878 2,948 3,249 3,273

EBITDA margin 58% 51% 52% 52% 50%

Blended ARPU QR 123.2 112.6 145.2 148.7 133.0

Employees 2,106 2,143 2,069 1,841 1,715

Blended ARPU is for the three months ended 31 December.2009

2010

2011

2012

2013

Ooredoo is Qatar’s leading communications company and the flagship operator of Ooredoo (Ooredoo Q.S.C.). Since 1949, the company has driven ICT innovation by providing its consumer and business customers with leading life-enhancing products and services.

Ooredoo is committed to promoting human growth and supporting Qatar’s rapidly-growing knowledge-based economy, in-line with the Qatar National Vision 2030.

24

Ooredoo marked a banner year as the country’s leading communications company in 2013, becoming the first operation to adopt the new brand of Ooredoo. The year also saw the opening of a new HQ in Doha, and the launch of a suite of 4G and fibre services that would enhance its market position.

In 2013 the company posted a record revenue of QR 6.6 billion, representing 6 percent growth from 2012.

Enhancing fixed and mobile broadband services was a key priority during the year. Ooredoo commercially launched Qatar’s first ultrafast 4G LTE network in April 2013, and continued to rapidly roll-out 4G coverage from the capital of Doha zone-by-zone, aiming to cover all inhabited areas of Qatar by 2014.

Fixed-line fibre optic broadband was another key area of growth. A global review by consulting firm Arthur D. Little published in 2013 stated that Qatar experienced the world’s fastest rollout of a fibre optic network in 2012, driven by Ooredoo’s nationwide investment, and the company continued to set the pace in 2013. The company launched Business Fibre – providing small and medium-sized enterprises (SMEs) with the same broadband capability already enjoyed by large enterprises.

Expanding the range of services provided to the business community was a major area of focus during the year. The company partnered with Arbor Networks to introduce a new suite of network security solutions for Qatar; upgraded services such as Shahry for Business; and continued to invest in the expansion of its TETRA mobile radio network, which – with 290 customers and 27,000 users by the end of 2013 – is one of the largest commercially-available networks of its kind in the world.

In order to support the next generation of technology leaders, Ooredoo signed a number of strategic agreements on research and development during the year, including a partnership with Carnegie Mellon University in Qatar.

Ooredoo continued to take a bold and aggressive approach to competition throughout the year. The launch of mobile number portability in January 2013 was treated as an opportunity to win customers back, and the company supported a range of initiatives to make it easier for people to switch to Ooredoo, including a dedicated mobile application. This was matched by on-going enhancements to Ooredoo’s entertainment portfolio, including the launch of the first entertainment application, Mozaic GO, in December 2013.

“Rebranding our operations has taken us to the next level as Qatar’s leading communications company. We have become closer to our customers, and the results have paid off with another strong year of growth across the board. Looking forward, we will continue to support the country’s growth through ICT, and promote human growth among our customers. This dual strategy will enhance the daily lives of Qatar’s population of more than 2.1 million people. In conclusion, I’d like to sincerely thank our dedicated staff for their exemplary efforts.”

Sheikh Saud Bin Nasser Al Thani CEO, Ooredoo Qatar


Ooredoo Qatar continued

26

Recognising that people are crucial to its success, Ooredoo in Qatar continued to invest in training, development and recruitment, aiming to maintain its status as an employer of choice. Qatarisation levels remained positive, and the company’s Echo Employee Survey showed high levels of engagement across the company, with more than eight in ten employees saying they felt excited about the new brand.

The year aheadQatar’s economy continues to be dynamic and Ooredoo sees strong potential for on-going strategic growth throughout 2014. Major projects under development for the FIFA World Cup 2022, as well as the significant expansion of Qatar’s transport and logistics infrastructure, create new opportunities for network development and strong demand for Ooredoo services.

The rapid expansion of the Ooredoo Fibre and 4G networks achieved in recent years should deliver a direct impact on revenues and profitability in 2014. Increasing availability of 4G devices, along with planned enhancements of Ooredoo’s data products and services, are set to boost the number of customers using 4G in Qatar.

Ooredoo will continue to invest in enhancing the customer experience in Qatar, including a push towards greater flexibility and easier access, and updates to the Ooredoo mobile application, nationwide network of self-service machines, social media and the Ooredoo customer centre.

Sport and sports sponsorship provide an important opportunity to distinguish the Ooredoo brand in a challenging market, and the company has a “Year of Sport” planned for 2014, which includes sponsorship of local sportspeople, major events and traditional sporting cultural activities.

Ooredoo will continue to support Qatar’s business sector, revamping its full range of business services throughout 2014. As Qatar continues to develop, Ooredoo will continue to pursue new opportunities in fast-growing fields like healthcare and education.


Indosat in Indonesia

Indosat is a fully integrated telecommunication network and services provider operating in Indonesia, which is the fourth most populous nation on earth. Indosat is the country’s second largest mobile operator in terms of consolidated revenue and serves more than 59 million customers on its nationwide network.

As one of the operators mandated to provide national and international long-distance telecommunications services, Indosat offers a broad product suite that spans voice, internet, data, and VoIP.

33,5

61 44,8

22

59,6

92

51,9

41 58,6

39

Ownership Ooredoo has a 65 percent stake in Indosat.

25%Revenue

62%Customers

26%EBITDA

30%Capex



2009 2010 2011 2012 2013

Revenue QRm 6,579 7,942 8,550 8,804 8,371

EBITDA QRm 3,207 4,034 4,159 4,420 3,862

EBITDA margin 49% 51% 49% 50% 46%

Blended ARPU QR 16.4 13.4 10.2 9.9 8.8

Employees 7,135 6,694 4,461 3,827 3,956


2010

2011

2012

2013

28

“This year, we have aligned all of our efforts around one driving ambition: to deliver the best possible experience for our customers, at every single step in their Indosat journey. Whether joining our network for the first time, discovering and accessing new services, or simply looking for help and guidance, we have enhanced the ways in which our customers can interact with Indosat and secure the support they need. With several major network improvements achieved – and with a rapidly expanding opportunity to take advantage of growing demand for data services – we look forward to another year of innovation and excellence in 2014.”

Alexander RusliPresident Director and CEO, Indosat

Indosat exits 2013 having delivered upon a number of important strategic commitments. The company continued to modernise its network by adding new capacity and technologies to improve reliability and reach. New services were launched that further extend Indosat’s capabilities in terms of voice and higher-value data-driven offerings. With core business commitments achieved, the Indosat team also continued to deliver on its commitment to Indonesia, playing its part in driving social and economic development.

The clearest signal of Indosat’s progress came in September, when it became the first operator in Indonesia to commercially launch a UMTS 900MHz network. This milestone unlocked a new range of advanced mobile broadband services, as well as wider network coverage and faster internet speeds. New Point of Presence (PoP) technologies were unveiled in key urban areas to improve indoor coverage and several other parts of the company’s fibre. Moreover, cable and satellite networks were upgraded, in line with Indosat’s three-year plan to deliver the best customer experience in Indonesia.

The ever-increasing reach of the Indosat network is matched by a similar pace of change in service innovation. Indonesians then saw the launch of IM3 PLAY, which presents two package options for customers. The first is “IM3 PLAY Online,” which offers free year-long internet and BlackBerry messaging, and the second is “IM3 PLAY Phone and SMS,” which offers free 24-hour calls to fellow Indosat users and free SMSs to all, regardless of operator. This year also marked the launch of new mobile money services with local and international partners, which earned Indosat the award for “Best Mobile Money Services in Asia” at the 2013 Mobile Money Global Awards.

In terms of local commitment, Indosat rolled-out a number of important initiatives this year. In the field of entrepreneurship and economic development, Indosat partnered with the Founders Institute to help the most prominent local “app” developers accelerate their innovations and bring real-life digital products to market.

The year aheadIn such a dynamic country – with such a high proportion of the population below the age of thirty – one of the largest opportunities open to Indosat in 2014 is the growing demand for data services. While demand for data is speedily increasing, the overall penetration of data services remains relatively low, opening up multiple opportunities to grow for Indosat.

Digital Services such as mobile financial services, e-commerce, m-advertising, and partnership with key global Over The Top (OTT) players also represent key focus areas for the company in the year ahead.


Wataniya Kuwait

Wataniya Kuwait is the second largest mobile telecommunications operator in Kuwait, and its success lies in its commitment to deliver innovative services and an outstanding customer experience. Wataniya Kuwait provides a wide range of communication and internet services to both individuals and corporate customers. The company offers a portfolio of secure wireless internet and mobile services along with business efficiency tools for corporate customers under the WPro brand.

Wataniya has tailored offers and experiences to complement the needs of its diverse customer segments, such as The W’s Plan for its most valued customers, InTouch for foreign residents living in Kuwait, and the pre-paid Xpress plan. In addition, Wataniya has introduced a range of value-added services to optimise their user experience, such as Rent-a-Number, SMS bundles, international top-up service, and a mobile self-care app.

1,95

8

1,77

9

1,53

8

1,97

0

2,03

2

Ownership Ooredoo holds a 92.1 percent stake in Wataniya Telecom (NMTC), which is listed on the Kuwait Stock Exchange. NMTC is the legal entity that owns shares in Ooredoo Maldives, Bravo, Ooredoo Tunisiana, Ooredoo Algeria, and Wataniya Mobile Palestine.

7%Revenue

2%Customers

5%EBITDA

14%Capex



2009 2010 2011 2012 2013

Revenue QRm 2,580 2,827 3,223 2,880 2,500

EBITDA QRm 1,188 1,262 1,469 1,101 667

EBITDA margin 46% 45% 46% 38% 27%

Blended ARPU QR 137.1 131.6 118.8 96.2 87.3

Employees 855 1,008 1,000 1,078 950


2010

2011

2012

2013

30

“Despite the challenges we have faced in 2013, I am pleased with the significant progress we have made this year – all of which has reaffirmed our reputation for service excellence and service leadership. We have placed a strong emphasis this year on enriching the service we offer to our customers, expanding the channels through which those services can be accessed, and extending the reliability of the service once chosen. The launch of 4G is a landmark for us and for Kuwait, and we look ahead to 2014 with optimism, excited by the new opportunities and challenges that our position as one of the leaders of telecommunication services in Kuwait brings.”

Abdul Aziz Fakhroo CEO, Wataniya Kuwait

During 2013, Wataniya delivered on several key commitments, each of which helped to retain its strong market position and customer trust.

2013 saw Wataniya launch Kuwait’s first-ever 4G service: a proud achievement that delivers some of the world’s fastest speeds to Kuwaiti consumers. In addition to this, the speed and quality of the company’s entire network has been significantly enhanced, including important coverage and performance updates to the nationwide 3G and 2G network technologies. New partnerships and initiatives have also been forged, as in the case with leading vendors Huawei and Ericsson, each designed to ensure that Wataniya’s service quality continually sets standards rather than following them. All of these enhancements have served to further enrich the customers’ experience, whatever speed or service they choose.

The company faced a number of challenges during 2013, as a result of market conditions and rising competition. However, Wataniya Kuwait took a number of key steps to overcome these challenges.

Led by its commitment to provide customers with easy access to better meet their needs, Wataniya has launched a number of important service initiatives this year. In 2013, Wataniya became the first operator in Kuwait to launch a fully-fledged mobile compatible website. This step unlocked a wealth of new possibilities for customers, who can now carry out essential billing and service tasks on-the-go.

Since its launch, visitor traffic to the site has increased 12 percent and a new online ‘live chat’ service to answer customer queries has proved equally popular. An enriched online experience has been matched by parallel service enhancements in other areas. A new CRM-based point-of-sale and partner management system was launched during the year, speeding up and revolutionising service across the retail network.

With new and improved ways to access Wataniya rolled-out in the country, the company has also made further progress with its plans to add rich new services to its offering. During the year, Wataniya launched the popular messaging application, WhatsApp, across the network. Furthermore, conscious of the ever increasing popularity of mobile commerce and banking applications in Kuwait, the company entered into a strategic partnership with AIG Insurance and strengthened its banking relationships so that customers can now make debit and credit card payments on-the-go.

The year aheadWataniya Kuwait enters 2014 in a strong position. The landmark developments of 2013 mean that the company now has the most advanced – and fastest – network in Kuwait. The company will continue to build on the encouraging success of its e-commerce and e-service channels, both of which present multiple new opportunities for growth. 2014 will also see Wataniya take advantage of its position in 4G, driving customer adoption and capitalising on the new services and experiences 4G opens up to Kuwaiti consumers.


Nawras in Oman

Nawras is Oman’s second full-service operator, commanding an important share of the country’s mobile customers based on a strategy of service innovation, quality and reach. Nawras delivers a wide range of mobile, fixed and internet services across advanced wireless and fibre networks.

From the 2007 launch of 3G+ wireless broadband services to the award of the Sultanate’s second fixed telecommunications licence in 2009, and the 2010 launch of corporate fibre and consumer broadband services, Nawras has continuously set the pace of change in Oman’s telecommunications market. Today, Nawras is one of the largest companies listed on the Muscat Securities Market.

Ownership Ooredoo holds a 55 percent effective economic stake in Nawras.

Total customers (thousands)

2%Customers

6%Revenue

6%EBITDA

8%Capex

Operator importance to Group


2009 2010 2011 2012 2013

Revenue QRm 1,625 1,864 1,939 1,907 1,990

EBITDA QRm 827 968 979 902 933

EBITDA margin 51% 52% 51% 47% 47%

Blended ARPU QR 73.5 73.8 80.4 70.8 63.8

Employees 743 898 1,019 1,027 1,051

Blended ARPU is for the three months ended 31 December.

1,861

2,033

2,397

2,193

1,960

2013

2012

2011

2010

2009

32

Thanks to the efforts of the past twelve months, 2013 will be looked back upon as the year in which Nawras established itself as the undisputed mobile technology leader in Oman. This year has seen the Nawras team deliver convincingly upon its commitment to ‘Turbocharge’ its network, opening up new services that clearly set it apart from other operators in the country.

The network enhancements made in 2013 add up to a long and impressive list. Nawras has invested in WiMAX broadband, remaining well positioned to capitalise on the rapidly growing appetite for broadband and data services. The company has comprehensively upgraded its important backbone of base stations, with over 220 3G sites upgraded during the course of the year and a new fibre ring activated in the south of the country, enhancing speeds and reliability. To further improve user experience, in May the company activated its third 3G data carrier: a development which dramatically improves indoor coverage for 3G customers. Perhaps most importantly of all, however, was the switch-on in February of cutting-edge 4G LTE services in Muscat and Al Batinah, which uniquely positioned Nawras as the only operator in Oman to offer such superfast services – and indeed one of only 80 4G-enabled countries worldwide.

2013 has not been solely about network improvement. Service excellence has also featured heavily in Nawras’ strategic planning. Certain developments are designed to answer a specific customer need, such as the introduction of real-time charging for post-paid customers and new roaming solutions: two popular initiatives that enable customers to accurately monitor their usage and expenditure. Other developments have been more revolutionary, such as the introduction of new “Smart Services” which aim to detect a customer issue and provide a suitable solution long before the customer has detected it. In recognition that a customer’s experience is directly linked to the company’s own operational excellence, a new Network Operation Centre was opened in December in Bausher, enabling sophisticated monitoring and centralised control of the entire nationwide network.

The year aheadIn the year ahead Nawras will work hard to deliver on the multiple new opportunities that its ‘Turbocharge’ efforts have opened up. Building upon its clear technological lead, the company will continue to stay ahead of the development curve and provide an unrivalled data-led user experience. These efforts, coupled with an ongoing focus on relevant new services such as home and mobile broadband, should continue to drive customer acquisition and retention across all user groups and all value segments.

“As we enter this new and exciting year, Nawras is without question the strongest, most innovative and most forward-thinking operator in Oman. Our network leadership is undisputed – and with the switch-on of 4G services this year, Nawras joins the ranks of a still small number of operators around the world to offer such high speeds. When we innovate and when we strive to reach new highs, our customers benefit. With such a strong technology backbone now in place, we look forward to extending those benefits to even more customers nationwide in 2014.”

Greg Young CEO, Nawras


As the first company to introduce mobile services to the country, Asiacell has a long and proud connection with the people and nation of Iraq. In a joint venture started in 2007, and in partnership with prominent members of the Iraqi business community, Asiacell won a competitive bid for a long-term fifteen-year mobile licence in Iraq; a significant milestone in the development of Iraq’s communications market.

Since inception, Asiacell has delivered rapid coverage and revenue growth, and continues to set ever-higher standards of quality and service.

Today, following the completion of its 2013 IPO, Asiacell is a publicly listed company in its own right and is Iraq’s largest mobile operator in revenue terms, providing mobile services to more than one third of all Iraqi mobile users.

Asiacell in Iraq

7,35

1

8,13

0

10,7

34

8,97

9

10,0

30

Ownership Ooredoo has a 64.1 percent effective economic stake in Asiacell.

21%Revenue

11%Customers

25%EBITDA

14%Capex



2009 2010 2011 2012 2013

Revenue QRm 3,998 5,054 5,934 6,878 7,071

EBITDA QRm 2,162 2,621 3,233 3,689 3,629

EBITDA margin 54% 52% 54% 54% 51%

Blended ARPU QR 52.1 56.0 60.1 61.6 54.8

Employees 2,158 2,170 2,821 2,906 2,811


2010

2011

2012

2013

34

2013 has been a transformational year for Asiacell: one in which the company broke through the 10 million customer barrier, revitalised its service offering, and transitioned successfully to public company status. Each of these achievements has been galvanised by a strategy that prioritises customer experience and recognises the important role Asiacell plays in Iraqi society.

Asiacell’s prominence increased yet again in 2013, following completion of the company’s landmark IPO. The transaction, which saw Asiacell raise $1.27 billion from both international and domestic investors, is the largest ever IPO to take place in Iraq. The significance of this achievement has been recognised by a number of independent bodies, with the Asiacell team proud to see their work recognised as “Best Equity Capital Market Deal” of the year during the TMT Finance MENA 2013 Conference in Dubai.

During the year the company launched a new customer experience programme designed to ensure that Asiacell can anticipate and surpass customer expectations now – and in the future. This programme has already delivered a positive impact on customer acquisition, retention and value, and informed the launch of five major new product and service offerings. Asiacell’s services, each tailored to distinct customer groups, continue to lead the market. In February, Asiacell’s popular efforts to provide tailored communications services to Iraqi women via its Almas Line offering were recognised when the company was awarded the Global Mobile Award for “Best Mobile Product or Service for Women in Emerging Markets.”

The year aheadThe routes to continued success for Asiacell in 2014 are clear. First, the company will seek to consolidate its position as a trusted Iraqi company by ensuring that its service remains resilient, reliable and innovative across all regions. Secondly, in an increasingly vibrant Iraqi economy, Asiacell’s B2B strategy will focus on capturing the many untapped opportunities to serve Iraqi business customers and help them realise their true potential.

“2013 has been a transformational year for Asiacell. We have made unprecedented efforts to expand our service offering and build upon the strong connection we have with our customers. Our award-winning IPO demonstrates the fundamental quality and potential of our business. The strategy that has brought us to this point will continue to carry us through in 2014. Customer experience and a passion to help fellow innovators in our economy to grow and to succeed remain our driving forces as a team.”

Amer Al Sunna CEO, Asiacell


Ooredoo Algeria

Ooredoo Algeria, formerly known as Nedjma, commenced operations in Algeria in 2004. Today, it forms an essential cornerstone of the dynamic North African mobile marketplace.

As one of the freshest and most engaging brands in the country, Ooredoo offers its Algerian customers value-for-money mobile voice, data and broadband services. These are delivered across a robust nationwide network that was the first to introduce the ground-breaking 3G services in the market this year.

Ownership Ooredoo owns a 92.1 percent stake in Wataniya (NMTC). Ooredoo, through its own entities and indirectly through NMTC, holds an 80 percent stake in the operations of Ooredoo Algeria. This gives Ooredoo a 74.4 percent effective economic stake in Ooredoo in Algeria.


10%Customers

11%Revenue

11%EBITDA

19%Capex



2009 2010 2011 2012 2013

Revenue QRm 1,795 2,228 2,961 3,479 3,884

EBITDA QRm 590 841 1,101 1,374 1,583

EBITDA margin 33% 38% 37% 39% 41%

Blended ARPU QR 21.8 24.7 30.6 33.6 33.9

Employees 1,838 1,929 2,360 2,485 2,846


8,033

8,505

8,246

9,059

9,4922013

2012

2011

2010

2009

36

During this last year, Ooredoo’s Algerian team has placed significant focus on improving customer experience through network development and driven rapid awareness of the new Ooredoo brand by developing new social partnerships. These efforts have enabled Ooredoo to establish an early leadership reputation in 3G, maintain a strong market position, and make a substantial contribution to human growth among the Algerian people it serves.

2013 has been a transformational year for Ooredoo’s Algerian network with every core element of the network either modernised or replaced. Following a successful participation in the landmark 3G licensing process this year, December saw Ooredoo become the first Algerian operator to launch commercial 3G operations. The arrival of 3G heralds the start of a huge technological leap forward for Ooredoo in Algeria. The team has worked hard to establish a first-mover position, deploying more than 2,200 3G-enabled base stations in just ten weeks.

Innovation has not been limited to 3G. During the year, Ooredoo completed the roll-out of a fibre-optic network across the Algiers metropolitan area, which will significantly increase transmission capacity and enhance the range of services Ooredoo can offer. In November, the company expanded its Noudjoum customer loyalty programme, which awards points not only to residential but also to corporate customers. Furthermore, it introduced a number of new options that will enhance the customer experience across its network of own-brand stores.

Recognising its responsibility as a key contributor to the Algerian economy, Ooredoo also launched a revolutionary new collaboration this year with the Ministry for Industry to help fuel growth among small and medium-sized businesses. In line with the Group’s commitment to enrich the lives of its customers, particularly entrepreneurs and young people, this collaboration will see Ooredoo support innovative technological start-ups; help young developers of mobile applications and content to monetise their inventions; and increase the adoption of IT and communications services within small firms nationwide.

Illustrating their strong commitment and connection with the community, Ooredoo became the official sponsor of the Algerian National Football Team in their successful qualification campaign for the June 2014 FIFA tournament in Brazil, building on the company’s previous sponsorship for the team for the 2010 World Cup.

The year aheadOoredoo starts 2014 with great optimism. The opportunity to expand and build upon its first-mover position in Algeria’s new and emerging 3G ecosystem is large and exciting. Furthermore Ooredoo, like the Nedjma brand before it, is rapidly winning customer recognition and trust. The team aims to work hard in 2014 to leverage these clear advantages, and deliver the full benefits of 3G and dependable data services for customers across Algeria.

“2013 has been a landmark year for Ooredoo in Algeria. We start 2014 by leading the way in 3G mobile services. Our market position remains strong and our growth remains the strongest. Our network, our service offering, and our country’s economic future have been transformed by 3G. The transition to the Ooredoo brand has opened up new ways for us to connect with the customers we serve. In 2014, we intend to maintain our growth and leading position in 3G and across the mobile sector by continuing to assume our role in helping Algerians to grow and thrive.”

Joseph GedCEO, Ooredoo Algeria


Launched in 2002 as Tunisia’s first privately owned telecommunications company, Tunisiana’s arrival marked a step-change in the country’s communications market. Since then, Tunisiana has grown to become not only the country’s number one mobile operator, but also one of the country’s most trusted and recognised brands. Most recently, the company won a licence to offer fixed line communications services, providing a platform for it become a full-service telecommunications company.

Each day, Ooredoo Tunisiana’s truly national network delivers a range of prepaid and postpaid voice and data services to more than seven million individual and business customers across the North African nation. The company began to use the Ooredoo Tunisiana brand in 2013.

Ooredoo Tunisiana in Tunisia

7,44

0

5,21

1

5,93

0 7,21

0

6,62

0

Ownership Ooredoo owns a 92.1 percent stake in Wataniya (NMTC). Ooredoo, through its own entities and indirectly through NMTC, holds a 90 percent stake in the operations of Ooredoo Tunisiana. This gives Ooredoo an 84.1 percent effective economic stake in Ooredoo Tunisiana.

7%Revenue

8%Customers

9%EBITDA

5%Capex



2009 2010 2011 2012 2013

Revenue QRm 1,299 1,287 2,779 2,633 2,504

EBITDA QRm 701 713 1,573 1,350 1,310

EBITDA margin 54% 55% 57% 51% 52%

Blended ARPU QR 42.0 34.4 35.1 27.7 26.3

Employees 1,426 1,510 1,583 1,610 1,690

Blended ARPU is for the three months ended 31 December.Year 2009 and 2010 represents 50% of the financial performance.20

09

2010

2011

2012

2013

38

Despite the challenge and change Tunisia has seen this year, Ooredoo Tunisiana has continued to succeed. At the heart of its success is a strategy to deliver an exceptional customer experience to all, while enhancing loyalty among high-value, data-hungry customers. From its market-leading position, Ooredoo Tunisiana has expanded its service offering this year, anticipated and met changing consumer demands, and continued to deepen its connection with key social groups.

Ten years after the company first switched on its mobile network, 2013 saw Ooredoo Tunisiana reach a new landmark in its development, with the launch of its first fixed-line service. Alongside this fixed line launch, the company made further progress in its plan to become Tunisia’s leading data provider, building on the 2012 roll-out of 3G to deploy high-speed fibre services in three key urban areas. Ooredoo Tunisiana’s move from being a pure mobile operator to a full-service carrier has put the company in a strong position to generate new value from bundled offerings, in both the consumer and corporate market segments.

In addition to ensuring its network strength, Ooredoo Tunisiana is also committed to continuously improving customer service. 2013 saw the launch of a wide-ranging Customer Experience Programme that was designed to help anticipate customer demands and increase engagement. Recognising that service innovation is an important part of the overall customer experience, Ooredoo Tunisiana continued to drive adoption of some of its newest offerings, including Mobiflouss this year. This mobile payment service, which runs in partnership with the Tunisian Post Office, now has more than 200,000 active users.

Exhibiting its strong sense of corporate social responsibility, this year Ooredoo Tunisiana has worked hard to find new ways to translate its leading market position into initiatives that support human growth. Ooredoo Tunisiana’s involvement in Najja7ni is just one example: a scheme offering mobile-based learning and development for young people in Tunisia, which has won a series of awards in recognition of its positive impact.

The year aheadTunisian consumers continue to demand and respond well to new technologies. As smartphone penetration across the country continues to increase, 3G is becoming the consumer’s preferred method of internet access, presenting Ooredoo Tunisiana with a unique opportunity to drive adoption of its pioneering mobile data offering. An emphasis on delivering the best customer experience possible will continue to be the cornerstone of Ooredoo Tunisiana’s strategy, and in 2014 the company plans to develop new services, create new content, and forge new partnerships that help maintain its position as Tunisia’s operator of choice.

“As we exit our tenth year of operations, Ooredoo Tunisiana can proudly claim to be Tunisia’s operator of choice. We offer the broadest and most relevant range of communications services available in our market. We share the same dynamic spirit as the customers we serve constantly innovating to help them to achieve their own ambitions. Furthermore, our customers’ needs sit at the heart of everything we do. With our firm determination to be the best service provider for our customers, I am certain that we will continue to succeed and set the pace of change in our market.”

Kenneth Campbell CEO, Ooredoo Tunisiana


Wataniya Mobile Palestine

Wataniya Mobile Palestine is the second licensed mobile operator in Palestine and was awarded its licence in 2007. 2010 was Wataniya’s first full year of commercial operations after the successful launch of services in the West Bank in 2009.

Following the highly successful completion in January 2011 of the company’s initial public offering, Wataniya Mobile Palestine is today one of Palestine’s largest public companies. It is a significant player in the Palestinian mobile market and is progressing with plans to expand its presence into Gaza. Through a range of services and products, the company currently offers the opportunity to enjoy a communications service based on network quality, reliability, and choice to approximately 2.8 million people in the West Bank.

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Ownership Ooredoo has a 92.1 percent stake in Wataniya (NMTC). Following the initial public offering, NMTC holds a 48.45 percent stake in the operations of Wataniya Mobile Palestine. This gives Ooredoo a 44.6 percent effective economic stake in Wataniya Mobile Palestine.

1%Revenue

1%Customers

0.2%EBITDA

0.5%Capex



2009 2010 2011 2012 2013

Revenue QRm 8 140 273 306 325

EBITDA QRm (74) (79) 14 23 33

EBITDA margin - - 5% 7% 10%

Blended ARPU QR 23.9 43.0 43.9 35.4 34.7

Employees 275 355 410 418 433


2010

2011

2012

2013

111

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Over the course of the past twelve months, the Wataniya Mobile Palestine team took steps to strengthen its existing network infrastructure; secured partnerships that embolden its service offering in key customer verticals; and pursued a strategy that will see it extend services in 2014 to the important Gaza region. Each of these initiatives has been undertaken with the aim of ensuring seamless customer service – and without a significant impact on expenditure.

During the year, Wataniya Mobile Palestine has upgraded the software across all of its key network nodes and added new radio sites to its array, extending coverage to more hard-to-reach areas and improving reliability in districts already served. The company also sharpened its focus on key customer groups, in particular the youth segment which has the potential to deliver considerable growth in the years ahead.

By signing a strategic partnership agreement with three of Palestine’s major universities, and through the launch of innovative services such as “Wataniya Space” – the first telecom-sponsored social platform of its kind in Palestine – the company is well positioned to capitalise on the youth opportunity. 2013 also saw Wataniya receive the necessary permissions to enter its telecom equipment into Gaza: an exciting strategic step in the company’s development.

In spite of these significant undertakings, the company has maintained firm control of its cost base. Embracing new marketing channels, particularly social media channels, has generated a 20 percent saving in marketing expenditure this year, and the company’s operating and capital expenditure targets have both been achieved.

The year ahead2014 will see Wataniya Mobile Palestine continue along its strategic path, with particular focus and energy set to be devoted to the exciting roll-out of services across Gaza. Once live, this launch will further increase the company’s mobile market share across Palestine and inject a new, welcome level of competition into this key market. In addition to this Gaza roll-out, the company intends to revamp its core operating system and infrastructure in order to pave the way for the introduction of new and innovative services – for all of its customers – in the next eighteen months.

“Our entire team can be proud of the many successes they have achieved this year. The resilience of our network, its reach and the relevance of our services has each continued to grow in 2013. Our bond with our customers remains strong; and with plans to extend our reach into Gaza in 2014, we will soon begin to touch and enrich the lives of new customers of all ages.”

Fayez HusseiniCEO, Wataniya Palestine


Ooredoo Maldives

From moderate beginnings in 2005, Ooredoo Maldives is today able to offer mobile and data services to more than 99 percent of the population of the Maldives. Supporting a vibrant economy centred on tourism, Ooredoo provides a range of mobile services to the Maldives’ many international visitors across the 4G and LTE-ready network.

Ooredoo Maldives is pursuing a defined long-term strategy focused on increasing network coverage, expanding network reach, and the ongoing nationwide roll-out of broadband services.

Ownership Ooredoo has a 92.1 percent stake in Wataniya (NMTC), which holds 100 percent of the operations of Ooredoo Maldives. This gives Ooredoo a 92.1 percent effective economic stake in Ooredoo Maldives.


0.3%Customers

0.5%Revenue

0.3%EBITDA

0.5%Capex



2009 2010 2011 2012 2013

Revenue QRm 97 117 124 146 166

EBITDA QRm 5 15 22 34 38

EBITDA margin 6% 13% 17% 23% 23%

Blended ARPU QR 52.0 55.4 42.9 45.5 41.5

Employees 287 309 332 332 316


102

144

111

176

2492013

2012

2011

2010

2009

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Ooredoo Maldives has made further significant strategic steps forward in 2013. During the year, the company has greatly enhanced its service offering to customers; rolled out and derived real benefit from the transition to the Ooredoo brand; and successfully launched 4G/LTE services on both mobile broadband offerings and on mobile handsets. The introduction of 4G/LTE was an important milestone in Ooredoo Maldives’ development, opening up the fastest possible mobile speed to customers, and enabling swifter, more efficient broadband.

In addition to the 4G/LTE launch, 2013 saw Ooredoo Maldives complete a number of important infrastructure projects, each designed to further enhance the network. The radical modernisation of the company’s Radio Access Network (RAN) was perhaps the most significant of these projects, with a new Convergent Billing in One (CBiO) system also going live during the year. Ooredoo Maldives also launched a number of new innovative services, such as emergency credit functionality and the ability to make online bill payments. Each of these exciting improvements has created a superior customer experience, to which customers are responding positively.

In addition to these developments, in 2013 Ooredoo Maldives became one of the first Wataniya properties to rebrand to the Ooredoo name. This was one of the biggest and most positive strategic achievements of the year and the response has been truly overwhelming. The company recorded more than 70,000 Facebook “likes” on its social media presence following the launch – the highest of any such page in the nation.

The year aheadThe rebrand to Ooredoo and the launch of 4G have brought immense advantages to the company in terms of brand positioning, and Ooredoo Maldives aims to build on these achievements in the year ahead. It will continue with the development of the 4G service, and focus on enhancing and modernising the 64 2G sites currently in operation, taking network reliability and reach to the next level. Rebranding also enables the company to re-examine customer service and enhance the customer experience.

“Our achievements this year have been truly monumental. We are extremely proud to have been the first operation in Asia to rebrand to the Ooredoo name. The transition was smooth, happened overnight, and created huge excitement in our marketplace. The launch of 4G and our continued drive for fresh service innovations have strengthened our market position, and enable us to continue to deliver the best possible service to our valued customers.”

Haroon Shahul HameedCEO, Ooredoo Maldives


Ooredoo Myanmar

Ooredoo Myanmar is the newest operation within the Group. In June 2013, Ooredoo was selected as one of the two successful applicants to be awarded a telecommunication licence in the Republic of the Union of Myanmar.

Myanmar, one of the world’s least developed telecom markets, will become a key market for Ooredoo as it builds out a nationwide 3G network and delivers accessible, affordable and life-enhancing services to the people of Myanmar.

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Myanmar is a country full of potential. Ooredoo, along with 92 other firms that initially submitted interest applications for the licence, saw this fantastic opportunity. The Myanmar people are educated, entrepreneurial, ambitious and aspirational, yet the telecom services penetration rate is less than 12 percent. While all markets are unique, what makes Myanmar different is that parallel development opportunities are rapidly emerging at the same time, which telecommunications will have a key role in facilitating.

Ooredoo will offer a wide range of mobile communications services beyond voice and data to improve the lives of Myanmar consumers and help businesses run more efficiently. This will include the development of a comprehensive portfolio of life-enriching services, including mobile money, a range of mobile health services, and innovations to support farmers and agricultural development.

Ooredoo Myanmar will roll-out its services using a large distribution network which will quickly reach beyond Myanmar’s cities into the country’s rural areas. The company will leverage this network in deploying innovative solutions across 3G networks using 900 and 2100 frequencies, bringing data services where there had previously been only voice.

Ooredoo Myanmar is committed to enriching people’s lives and stimulating human growth as a community-focused business. Since launching its operations, Ooredoo Myanmar has been actively involved in the community and is the Official Sponsor of the Special Olympics Myanmar and the Myanmar Football Federation.

“Ooredoo has pledged to invest heavily in the Myanmar economy and strongly contribute to the development of the country. We will be investing in developing the Myanmar ICT sector, public health sector, education sector, as well as in youth empowerment programmes, women empowerment programmes and sport. As a community-based telco, we’re committed to supporting both urban and rural communities across Myanmar, in line with our vision of supporting human growth.”

Ross Cormack CEO, Ooredoo Myanmar


wi-tribe, Asia Mobile Holdings, and Other Investments

wi-tribe group was established in 2007, backed by Ooredoo’s unrivalled experience and capability. wi-tribe Pakistan, which began services in 2009, is now the country’s leading broadband for quality and customer satisfaction, operating in five regions: Islamabad, Rawalpindi, Lahore, Karachi and Faisalabad. In 2010 wi-tribe also launched in the Philippines and is today one of the fastest-growing 4G broadband internet services in the country.

Asia Mobile Holdings Pte. Ltd. (AMH) is a mobile communications investment company formed in 2007 to explore and invest in new mobile opportunities in the Asia Pacific region.

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wi-tribe PakistanOoredoo has an 86.1 percent stake in wi-tribe Limited, which owns 100 percent of wi-tribe Pakistan. With the launch of commercial-scale WiFi access 90 percent of its customer base is WiFi-enabled.

wi-tribe PhilippinesOoredoo has a 100 percent stake in wi-tribe Asia Limited, which owns 40.0 percent of Liberty Telecom. In the Philippines, wi-tribe has further exploited its WiMAX network. In addition, the company continued a number of LTE trials in cooperation with a handful of leading international telecom equipment vendors.

The Asia Mobile Holdings (AMH) PortfolioOoredoo owns a 25 percent stake in AMH. The remaining 75 percent stake is owned by Singapore Technologies Telemedia (STT). AMH, incorporated in Singapore, is the preferred investment vehicle for both Ooredoo and STT for investing in mobile operations in the Asia Pacific region.

AMH closed 2013 with investments in the following companies:

StarHub Ltd.AMH has a 56.6 percent stake in StarHub Ltd. (StarHub), which equates to an Ooredoo effective stake of 14.1 percent. Launched in 2000, StarHub is a fully integrated communication company offering a full range of information, communications and entertainment services for both consumer and corporate markets.

Shenington Investments Pte. Ltd.AMH has a 49 percent stake in Shenington Investments Pte. Ltd. (Shenington). Shenington has a 100 percent shareholding in Mfone Co Ltd., which equates to an Ooredoo effective stake of 12.2 percent. Mfone in Cambodia effectively discontinued operations in 2013. Shenington also owns a 49 percent shareholding in Lao Telecommunications Company Limited (LTC), which equates to an Ooredoo effective stake of 6.0 percent. LTC is the largest telecoms operator in Laos.

Other investmentsBravoBravo is a company that entered the Saudi Arabian market in 2005 as the country’s first specialised push-to-talk provider (PTT). Ooredoo held an effective 92.1 percent economic stake in Bravo through its 92.1 percent stake in Wataniya (NMTC). It was announced on 31 October 2013 that, pursuant to the Group’s focus on core businesses based on global technology standards, Saudi Telecom Company (STC) would acquire full ownership of Bravo from Wataniya. Three months later, on 30 January 2014, Ooredoo announced the successful completion of the divestment of Bravo to STC.


Our Social Responsibility

Our Social Responsibility

Ooredoo’s vision is to enrich people’s lives as a leading international communications company, and each of its operations strive to serve their communities to the best of their abilities. Where possible and useful, Ooredoo’s approach is to partner with grassroots and international organisations to strengthen the impact of its corporate social responsibility initiatives. These initiatives are developed through dialogue with customers, listening to their ideas and ambitions, and working to understand where Ooredoo can have the most positive impact.

In 2013, Ooredoo launched a number of initiatives at a Group level, which were rolled-out in different markets by the national operations. In addition, there was a strong programme of national activities, with a particular focus on young people, women, and reaching out to underserved communities.

Group CSR Initiatives In February 2013, in parallel with the launch of its new brand, Ooredoo unveiled football star Lionel “Leo” Messi as its global brand ambassador. As part of the partnership, Ooredoo agreed to work with the Leo Messi Foundation to develop and sponsor projects to stimulate human growth and development across markets in the Middle East, North Africa, and Southeast Asia.

The Leo Messi Foundation, which Messi founded in 2007, funds initiatives to help children in at-risk situations in healthcare and education. Its objectives are to ensure that all children around the world enjoy equal opportunities to make their dreams come true.

In 20 May 2013, Ooredoo brought young children from all over the world to Doha to meet their hero, Lionel Messi, in the “Play for Dreams” initiative held in Qatar. While in Doha, Messi announced that his Foundation and Ooredoo would support a mobile health clinic initiative to provide medical aid and community healthcare for children. The Mobile Clinics have been active in Indonesia throughout 2013, and there are plans in place to expand the programme in 2014.

A similar approach was taken with the sponsorship agreement with Ligue 1 Champions Paris Saint-Germain, which will see the two teams cooperate on a special community coaching programme across Ooredoo’s footprint, including football clinics for young people. The coaching clinics will be designed to create life opportunities for young people, and Ooredoo will bring qualified coaches and Paris Saint-Germain training programmes to a number of key markets, with a focus on supporting youth in underserved communities.

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Ooredoo in Qatar Ooredoo continued to play a key role in the community in 2013, building on its history as one of Qatar’s most active CSR supporters with a particular focus on education and health.

The year saw a number of partnerships with major academic institutions, including a partnership with Carnegie Mellon University in Qatar to support original scientific and technical research.

Following the launch of the Ooredoo brand in March 2013, one of its first major sponsorships was for Hamad Medical Corporation (HMC)’s World Kidney Day events. The week of activity included seminars and outreach activities at schools and universities, as well as a special walkathon to raise funds and awareness.

Ooredoo also launched the first Ooredoo Marathon in 2013, attracting 1,200 participants and raising a significant sum for the Qatar Red Crescent Society. The event is now planned as an annual activity, expanding to encourage more people to take part and live a healthy lifestyle.

Recognising that CSR activity has to go beyond material support, Ooredoo worked hard to engage with the community to develop meaningful programmes. For Ramadan 2013, Ooredoo launched a partnership contest with Al Rayyan TV to encourage the public to submit their ideas for life-enriching charity, community, and environmental projects, in line with Qatar National Vision 2030. Selected entrants appeared on the “Ramadan Mubarak” TV show, and the public voted by SMS for their favourite entry.

The winning idea was the “Ooredoo Technology Centre,” a new facility to train young people in digital media literacy and help develop new innovations, which is under development for 2014.

To broaden the appeal of Ooredoo initiatives, and encourage more people to get involved, the company launched the Alrabaa, a group of seven engaging characters who are on a mission to spread joy. The Alrabaa participated in a wide range of community and charity initiatives, including hospital visits and children’s activities, and have been warmly welcomed.

Indosat in IndonesiaEducation and enhancing opportunities for young people were major areas of focus for Indosat in 2013.

The year saw the launch of “IWIC 7” (Indosat Wireless Innovation Contest 7), Indonesia’s longest-running and most consistent app development challenge. Designed for young people who want to jumpstart their ideas and demonstrate prototype mobile apps, the 2013 edition saw Indosat partner with the Jakarta Founders Institute (JKTFI). A total of 667 ideas were received, and Indosat chose 20 to progress, entering their developers into its special accelerator class. The 120-day acceleration programme includes mentoring and the potential for seed funding.

Indosat also sponsored “Indonesia Mengajar” in 2013, an initiative to send Indonesia’s best young students to remote and rural areas to work as elementary school teachers for one academic year. The programme not only provides life opportunities for young people, it also provides an important connection with isolated communities.

Working with the Messi Foundation, Indosat’s Mobile Clinic programme was re-launched with a particular focus on children’s health, sending doctors and medical supplies to remote areas and aiming to educate communities about preventable diseases.

Furthermore, to illustrate its commitment to empowering women, Indosat initiated INSPÉRA, a programme that is aimed at improving the living standards of Indonesian women through telecommunication services and continuous community programmes. Partnering with the Women Empowerment and Children Protection Ministry and several key parties, Indosat established the Indonesia Womenpreneur Competition, which is a national competition for strong-willed and entrepreneurship-minded Indonesian women to start their journey as independent businesswomen.


Our Social Responsibility continued

These efforts were supported by the launch of a “Start-up Factory” fund for entrepreneurs. As Tunisia’s first end-to-end support programme, the Start-Up Factory supports numerous active start-ups with funding, training and development.

To support health and healthy lifestyles, Ooredoo Tunisiana equipped three regional hospitals during 2013 and signed a partnership agreement with the Ministry of Sport to extend the popular Tunisiana Junior Football programme to new regions in the country.

Nawras in OmanThe ninth Nawras Goodwill Journey took place in the month of July, during Ramadan, to provide support and donations to Omani Women’s Associations across the Sultanate. The mission was to advance education and computer literacy amongst Omani women, and encourage early learning and education for children in these communities.

Nawras provided the necessary tools to help with health and education needs. This included educating women in handicraft industries to improve their skills and capabilities, establishing charitable projects, and conducting awareness seminars and lectures to promote social, educational and health advances at home and in the community as a whole.

Since the first Nawras Goodwill Journey, volunteers have travelled thousands of kilometres across Oman each year to provide charitable organisations with donations, ranging from the latest technology and household appliances to vehicles and football pitches.

Members of the Nawras Goodwill Journey, who were practising the Muslim ritual of fasting, left their own families during the Holy Month of Ramadan to visit charitable and non-governmental organisations in the Sultanate. For eight consecutive years, the journey has helped more than 7,000 families in need and travelled over 48,000 kilometres across Oman to bring joy to local communities.

Wataniya Kuwait In 2013, Wataniya Kuwait focused on youth, sport and education as key areas to reach out to the needs of the community.

In January 2013, the company sponsored a special needs baseball team that competed in a tournament organised by Kuwait Little League. The company provided training facilities and encouragement for the special-needs players, to enable them to achieve their dreams.

Wataniya Kuwait also sponsored “Annual Festivals” for Kuwaiti youth studying abroad in February 2013. The event was organised by pupils of the National Union of Kuwaiti Students and provided a vital connection for overseas students, with two events for students in the UK and USA during the month.

As part of Kuwait’s National and Liberation Day celebrations, Wataniya Kuwait supported a series of visit to old people’s homes and orphanages to share the joy of the event with the whole community.

Ooredoo TunisianaIn Tunisia, there was a strong focus on CSR activities related to youth and education, employment, sport, health, and entrepreneurship in 2013.

One of the key initiatives was the continued expansion of “Naja7ni” services, a collaborative effort between Silatech and Ooredoo Tunisiana. The platform offers USSD-based mobile learning, employability and entrepreneurship support services to Tunisiana customers, free of charge.

In March 2013, “Naja7ni Employment” was launched as a training and employment platform to help young people find work. Developed by employment and education experts, the service provides up-to-date content about jobs, careers and budget management. Hundreds of thousands of young people in Tunisia accessed the service in 2013 and the service received numerous international awards during the year, including a “Silver Stevie” for “Best New Product or Service of the Year” at the International Business Awards.

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Wataniya MaldivesWataniya Maldives continued to play an active role across the islands in 2013, committing and signing to be part of the local network of the United Nations Global Compact’s principles in the areas of human rights, labour, environment, and anti-corruption.

It also engaged with the “Play for Dreams” campaign, sending one boy from a local orphanage to Doha to meet his hero, Leo Messi. His journey created a huge buzz in the Maldives, especially on social media, where his progress was closely followed.

The company also organised community-building activities across the Maldives throughout the year.

Asiacell in Iraq Asiacell continued to play an active role in the community in 2013, with a particular focus on welfare efforts and community support. The company made a significant donation to support relief work for the estimated 200,000+ Syrian refugees living in the Kurdistan Region of Iraq (KRI).

As part of its education efforts, the company built a new computer laboratory for the Sulaymaniyah Computer Institute.

Asiacell’s campaign for Ramadan was one of the most extensive in its history, with a special series of activities in Sulaymaniyah, Erbil, Mosul, Kirkuk, Baghdad, Karbala, and Basra.

Ooredoo Algeria In 2013, Ooredoo Algeria and The National Agency for the Development of Small and Medium Enterprises (ANDPME) announced a new agreement to launch a pioneering public-private collaboration to address some of the key issues facing the Algerian economy. The areas targeted are the under-development of the SME sector, particularly in relation to ICT; the structural difficulties preventing people from becoming an entrepreneur; and youth unemployment.

Ooredoo Algeria launched three programmes to tackle these issues during the year. One of these was “tSTART,” a programme launched in May 2013 designed to incubate innovative technological start-ups and transform good business ideas into real companies with domestic and international reach.

This was followed by iSTART, a programme that facilitates the development of mobile applications and mobile content, tailored to the Algeria market. Young developers can publish and sell their mobile apps on the Ooredoo Algeria OStore at no cost to them, allowing them to grow their app business.

The PISTE programme was launched to encourage ICT adoption in Algerian SMEs, via a special cloud platform offering basic applications for small businesses. The platform has proven to be popular with Algerian small businesses, and plans are in place to extend the range of software available in 2014.

Wataniya Palestine Wataniya Mobile Palestine expanded its efforts to reach the community in 2013, with a particular focus on young people and children.

The company was one of the most active participants in the “Play for Dreams” initiative, bringing Palestinian children to Doha to meet Leo Messi. It also distributed “Al-noud” games (educational games) to hundreds of nursery schools in the West Bank. Wataniya sponsored entertainment activities for children in Sabasteya City, where 100 Wataniya volunteers took part in a special range of entertainment activities for young people.

Education was also a major focus, with strategic agreements with the main universities in Palestine to sponsor student activities. Wataniya also co-operated with the United Nations Relief and Works Agency (UNRWA) initiative to reach out to people in Palestinian refugee camps, even bringing “Arab Idol” winner Mohammad Assaf to entertain the people there.

Wataniya Palestine also offered material support to the Gaza Orphans Welfare (Mostakbali) project and the Palestine Children’s Relief Fund (PCRF), covering travel costs for the injured children who needed treatment abroad.


Corporate Governance Report

Corporate Governance Report

Ooredoo values and corporate governanceOoredoo’s Board and management believe that good corporate governance practices contribute to the creation, maintenance, and increase of shareholder value. Sound corporate governance principles are the foundation upon which the trust of investors is built, and are critical to growing a company’s reputation for its dedication to both excellence and integrity.

As Ooredoo continues its rapid growth and global expansion, it is particularly critical to demonstrate to its new shareholders, customers, employees, and communities the same high level of commitment and good corporate citizenship that have earned it a strong reputation in Qatar.

Ooredoo aims to be a leader in corporate governance and ethical business conduct by maintaining best practices, transparency, and accountability to its stakeholders. This includes a commitment to the highest standards of corporate governance, by regularly reviewing the governance structures and practices in place to ensure their effectiveness and consistency with local and international developments.

Role of the Board of DirectorsThe primary role of the Board of Directors is to provide institutional leadership to the Company, within a framework of prudent and effective controls enabling risk to be assessed and managed. This role has been fully illustrated through the governance framework of the Company. In particular, the Articles of Association of the Group companies and the Corporate Governance Manual, in addition to Commercial Companies Law No. (5) for 2002 and Article 14 of the Corporate Governance Code issued by the Qatar Financial Markets Authority, which was incorporated as an annex to the Corporate Governance Manual of the Company.

The Board of Directors has the power and full authority to manage Ooredoo Qatar and the Ooredoo Group, and to pursue the primary objective of creating value for shareholders, with consideration given to the continuity of the Group’s business and the achievement of corporate objectives. As Ooredoo QSC is both the parent company of the Ooredoo Group and an operating company in the State of Qatar, its Board of Directors has a dual role.

Within this framework, the Board of Directors undertakes major responsibilities and duties, including:

− Vision and strategy: determining and refining the Group vision and objectives, as well as those of Ooredoo, which are the foundation for all the actions and decisions of the Board and management.

− Management oversight: appointing the CEO, establishing his duties and powers, assessing his performance, and determining his remuneration; nominating the Chairman, the Board members, and the key officers of Ooredoo and its Group.

− Financial and investment: reviewing and approving reports and accounts and overseeing the Group and Ooredoo financial positions.

− Governance and compliance: preparing and adopting the corporate governance rules for Ooredoo and establishing guidelines for the governance of the Group.

− Communication with stakeholders: overseeing shareholder reporting and communications.

“The Board of Directors and senior executives are entrusted with overseeing and managing Ooredoo Group, and this important responsibility requires commitment, objectivity, and accountability from those in leadership positions. Our role is to ensure the implementation of the highest governance principles and ethics in the company. We implement best practices in accordance with the requirements of stock markets in which Ooredoo is listed.

We assure our shareholders that the principles and policies of governance we implement are the basis for each decision we issue and procedure we implemented at Ooredoo Group level.”

Abdullah Bin Mohammed Bin Saud Al Thani Chairman of the Board

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The Board of Directors is also responsible for the disclosure of information to shareholders in an accurate and timely manner. All shareholders can access information relating to the Company and its Board members and their qualifications. The Company also updates its website with all Company news from time to time, in addition to including this information in the Annual Report presented to the General Assembly.

Relevant information is also disclosed to stock markets in Qatar and Abu Dhabi where Ooredoo’s stocks are listed, as well as the stock market in London where Ooredoo has Global Depositary Receipts (GDR), by means of quarterly reports and complete annual financial statements, in compliance with the terms and conditions of the applicable stock markets.

Board members Ooredoo’s Board of Directors has the following members:

H.E. Sh. Abdullah Bin Mohammed Bin Saud Al Thani ChairmanH.E. Ali Shareef Al Emadi Vice Chairman H.E. Mohammed Bin Issa Al Mohannadi MemberMr. Aziz Aluthman Fakhroo MemberMr. Nasser Rashid Al-Humaidi MemberMr. Turki Mohammed Al Khater MemberMr. Omer Abdulaziz Al-Marwani MemberMr. Hareb Masoud Al Darmaki MemberMr. Hamad Saeed Al Badi Member

Pursuant to Article 31 of the Company’s Articles of Association, the Secretary of the Board is responsible for all general secretarial duties. The duties of the Board Secretary are contained in the Company’s Corporate Governance Manual and the Corporate Governance Code issued by the Qatar Financial Markets Authority.

Board meetingsBoard meetings are held regularly, and no fewer than six times in a financial year, in accordance with Article 27 of the Company’s Articles of Association and Article (103) of Commercial Companies Law No. (5), 2002. The Board of Directors held seven (7) meetings in 2013, in addition to a Corporate Governance workshop.

In accordance with Ooredoo’s Corporate Governance Manual, the Board undertakes an annual evaluation of its own performance and the performance of its committees and commissions. The Board also verifies that the Chairman and Directors of the Company are aware of their duties under the Corporate Governance Manual and the Articles of Association of the Company, the Commercial Companies Law No. (5), and the Corporate Governance Code issued by the Qatar Financial Markets Authority. It also informs them of the latest developments in the field of governance and, according to requirements or the results of the evaluation process, development programmes are tailored for each Board member. If a Board member’s performance is deficient, and not resolved at the appropriate time, then the Board has the right to take appropriate action in accordance with the law and Corporate Governance Manual. In view of the above, each member signs an acknowledgement that he has perused the Corporate Governance Manual and Corporate Governance Code issued by the Qatar Financial Markets Authority, understood their content, and will adhere and comply with them while a member of the Board of Ooredoo.

For the senior executive management, evaluation is undertaken using a Target Score Card at the Company level, then at the level of the major sectors of the Company.


Corporate Governance Report continued

Composition of the Board The Board of Directors is composed in accordance with Article 20 of the Company’s Articles of Association. The Board of Directors consists of 10 non-executive members, five of whom, including the Chairman, are appointed by the State of Qatar. The other five Board members are elected by secret ballot of the General Assembly according to the applicability of the terms of the nomination. Only shareholders owning at least one percent (1%) of the Company’s capital may nominate candidates for these Board positions. A Board member’s term is four years and may be renewed.

Article (41) of the Articles of Association provides that shareholders holding no less than 1/10 of the capital have the right to call for a General Assembly meeting.

The Company pursues separation between positions, where H.E. Sh. Abdullah Bin Mohammed Bin Saud Al Thani is the Chairman, Sh. Saud Bin Nasser Al Thani is the CEO of Ooredoo QSC and responsible for its management, and Dr. Nasser Marafih is the CEO of Ooredoo Group and responsible for its management.

Conflicts of interest The Company adopts a policy that ensures the accuracy and correctness of any reports of illegal actions relating to employees and general performance measures, which are clarified in Ooredoo’s Code of Business Conduct and Ethics. The Code includes the expected behaviour of employees, particularly with regard to compliance with laws and regulations. Employees must avoid: conflicts of interest, particularly in commercial transactions, business administration and activities; using the Company’s assets, records, and information; and relationships with related parties outside the Company. No employee may accept or request gifts or bribes, loans or bonuses, prizes or commissions.

Furthermore, the Company complies with Article 108 of the Commercial Companies Law No. (5) for 2002 that does not permit the Chairman, a Board Member or a Director to have any direct or indirect interest in contracts, projects and covenants made in favour of the Company, with the exception of contracts and public tenders where all the competitors are equally allowed to participate by their offers.

Board members’ dutiesThe role of the Board of Directors is to lead the company in a pioneering way within the framework of effective directives that allow for risk assessment and management. The Board of Directors has authority and full power to manage the Company and continue business to fulfil the fundamental goal of upholding shareholders’ rights, in addition to the following tasks:

1. Determine the terms of reference, duties, and powers of the Chief Executive Officer and assess his performance and remuneration.

2. Evaluate and exercise the powers granted to the members of the Board of Directors and Board committees.

3. Monitor the performance of the executive management; audit and manage arrangements for executive management replacement and rewards.

4. Verify the appropriateness of organisational, administrative, and accounting structures for the Company and its Group, with a focus on the internal control system.

5. Ensure adequate planning for the replacement of executive management.

6. Provide recommendations to appoint, re-appoint, or remove the auditor appointed by the shareholders on the basis of their agreement during the Annual General Meeting of the Company, as recommended by the Audit Committee.

7. Direct members of the Board of Directors and seek guidance from them during the planning of programmes and tariff guidelines. The Chairman of the Board is responsible for providing guidance programmes and guidelines to Board members, to help them perform their duties and ensure they understand ongoing developments on Company issues.

8. The Board of Directors is expected to be seriously committed to the Company, and also to develop and expand their knowledge of the Company’s current operations and its main business, and to be available to contribute to the work of the Board and Committees.

58

9 Members of the Board of Directors and executive management will be trained according to their availability.

Chairman of the Board’s role and dutiesThe main task of the Chairman of the Board is leadership, and to undertake his duties as required by law and the relevant legislation, in addition to the following tasks:

1. Represent the Company in court, and in its relationship with others, and to communicate with and inform the Board.

2. To chair the Board, selected committees, and Board meetings, and run discussions as openly as possible, to encourage Board members to participate effectively in discussions that serve the interests of the Company.

3. Coordinate with the Chief Executive Officer and the heads of the committees and the Secretary of the Board of Directors to determine the schedule for Board and committee meetings, and other important meetings.

4. Coordinate with the Chief Executive Officer to ensure that information is provided to the Board of Directors, so that the Board can make appropriate decisions.

5. Review the timing and quality of supporting documentation to ensure an effective flow of information to the Board of Directors.

6. Guide and enhance the effectiveness of the Board of Directors and members, and assign tasks to them as required.

7. Review monthly results for the Company’s business in coordination with the Chief Executive Officer.

8. Ensure that the Company has good relations with official and non-official departments, and with various media.

9. Issue the agenda for Board meetings, taking members’ suggestions into account. Assess the performance of the Board annually, and the performance of its committees and members, possibly using a third-party consultant to conduct the evaluation.

The Chairman may delegate some of these powers to another member of the Board of Directors, or the Chief Executive Officer, or the Secretary of the Board.

Qualifications of the Board SecretaryThe Board of Directors has appointed Mr. Ezzedine Hamad as Secretary of the Board of Directors. Mr. Ezzedine holds a Bachelor’s degree in law from the University of Khartoum (1971), and practised law in Khartoum from that time until 1984. He then practised law in the State of Kuwait from October 1984 until August 1990, when he moved to work as Ooredoo’s legal counsel. He is currently in charge of the legal department and regulatory affairs of the Company.

Board activities in 2013In 2013, Ooredoo’s Board of Directors achieved a number of key governance goals and supervised the implementation of a number of key successful initiatives, including:

− Approving a number of technical decisions relating to investment opportunities.

− Approving the Company’s budget for 2013.

− Adopting Ooredoo Group’s 5-year strategy and budget allocation.

− Determining risk tolerance for Group companies.

− Approving the Company’s capital restructuring.

− Adopting the covenants for committees of the Board of Directors.

− Adopting the statements of tenders and bids.



Board CommitteesCommittee Name of Board member Position

Executive Committee H.E. Sh. Abdullah Bin Mohammed Bin Saud Al Thani ChairmanH.E. Ali Shareef Al Emadi Vice ChairmanH.E. Mohammed Bin Issa Al Mohannadi MemberMr. Hareb Masoud Al Darmaki MemberMr. Aziz Aluthman Fakhroo Member

Audit and Risks Committee Mr. Turki Mohammed Al Khater ChairmanMr. Nasser Rashid Al-Humaidi Vice ChairmanMr. Hamed Saeed Al Badi MemberMr. Omer Abdulaziz Al-Hamed Al-Marwani Member

Nomination and Remuneration Committee

H.E. Mohammed Bin Issa Al Mohannadi Chairman

Mr. Turki Mohammed Al Khater Vice ChairmanMr. Nasser Rashid Al-Humaidi MemberMr. Omer Abdulaziz Al-Hamed Al-Marwani Member

Role of Board committees In order to make the decision-making process more efficient and to support the vision relating to corporate governance, in 2012 the Ooredoo Board restructured its committees into three main committees: Executive Committee, Audit and Risks Committee, and Nomination and Remuneration Committee.

Each committee is composed of not less than four Board members (to be appointed by the Board), except for the Executive Committee that shall comprise five members, taking into account the experience and capabilities of each Board member participating in the committee. The Board may substitute the committee members at any time.

Each of the Board committees works in accordance with a written charter approved by the Board of Directors that clarifies its responsibilities and authorities. The charter of each committee has verified that it is in line with the Corporate Governance Code and Articles of Association of the Company and the Commercial Companies Law No. (5) for 2002, and the Corporate Governance Code of the Qatar Financial Markets Authority.

A. Executive CommitteeThe committee aims to ensure that decisions are made at the highest levels, to achieve the Company’s objectives in a flexible and timely manner in accordance with the authority delegated to the committee by the Board of Directors.

The committee is also responsible for studying issues that need detailed and in-depth review before presenting to the Board for final decision. It also oversees Ooredoo’s strategy and methods deployed for adopting financial and strategic investments.

In 2013 the committee completed a number of major projects:

− Reviewed investment opportunities and made recommendations to the Board of Directors.

− Reviewed recommendations for awarding contracts, and took appropriate decisions.

− Reviewed the conditions of Ooredoo Group companies to determine suitability and position in the markets in which it operates, and made recommendations to the Board of Directors.

60

− Reviewed the Company’s financial portfolio.

− Reviewed the draft charter of the Executive Committee and submitted it to the Board of Directors for approval.

− The committee held five (5) meetings in 2013.

B. Audit and Risks Committee The committee assists Ooredoo’s Board in overseeing the integrity of the Company’s financial statements. It also provides consultancy to the Board on the efficiency and adequacy of internal control system and arrangements for risk management. The committee is also responsible for ensuring that internal and external audit functions are independent and objective.

The committee reviews the annual internal audit and auditors’ reports, and prepares reports on issues arising from auditing the Company and its subsidiaries, including management reaction; the level of cooperation and information provided during the audit process; and the usefulness of the audit report versus cost. The committee also sets up communication channels between executive management and internal and external auditors.

In 2013 the committee completed a number of major works including:

− Reviewed the annual and quarterly internal audit reports.

− Reviewed quarterly Risk Management Report regularly.

− Reviewed the annual internal audit plan.

− Reviewed all financial statements before submitting to the Board.

− Reviewed the results of the Internal Audit Quality Assurance Review for Ooredoo and Group companies.

− Reviewed the quarterly and annual Enterprise Risk Management Reports for the Company and the Group.

− Supported management in reviewing major risks and audit plans.

− Approved the top ten risks.

− Reviewed the statements of tenders and bids by the Company and submitted to the Board of Directors for approval

− Reviewed the covenants of the Auditing and Risk Committee and submitted to the Board of Directors for approval.

− The committee held eleven (11) meetings in 2013.

C. Nomination and Remuneration CommitteeThe committee assists the Board in executing its responsibilities in regards to nominating and appointing Board members to the Company and its affiliated companies, and determining the remuneration of the Chairman and members of the Board, and the remuneration of senior executive management and officials. The committee also takes part in assessing the performance of the Board.

In 2013, the committee completed a number of major works:

− Approved the Performance Index Card for 2013 and agreed on the performance index for 2012.

− Approved the assessment of the executive directors for 2012.

− Approved the mobility policy.

− Reviewed the Remuneration and Nomination Committee’s charter and submitted it to the Board of Directors for approval.

− Approved a mechanism for early exit for the cancelled positions.

− Approved the appointment of the CEOs of Nawras and Ooredoo Myanmar.

− Reviewed the grade and pay scale and the housing mechanism, and submitted them to the Board for approval.

− The committee held six (6) meetings during 2013.



Corporate Governance Department and Governance Committee The Corporate Governance Department was established in 2008 and is responsible for assisting the management and Board in ensuring the efficiency and implementation of corporate governance policies and practices in Ooredoo and its Group.

To ensure continuous monitoring and following up of issues and policies of corporate governance, the Corporate Governance Committee was established, headed by Ooredoo’s Head of Corporate Governance, and composed of the Head of Group Corporate Affairs, the Group Financial Controller, the Group Board Secretary, the Group Legal Counsel, and the Group Chief Audit Executive. Sheikh Ali Bin Al Jabor Al Thani acts as compliance officer.

In 2013 the Corporate Governance Department completed a number of major works:

− Monitored the implementation of Corporate Governance in Ooredoo Group companies.

− Reviewed the list of Ooredoo representatives on the boards of the Group’s companies.

− Adopted an employee disclosure procedure for non-Ooredoo interests.

− Monitored the publication of the Corporate Governance code in Group companies.

− Assisted the Board of Directors in the annual assessment and evaluation of adherence to the Code of Conduct.

− The committee held four (4) meetings in 2013.

Internal audit objectives and activities Providing independent and objective consultancy services drafted in a way that contributes to adding more value and improving Ooredoo’s processes. These tasks are performed under the supervision of the Audit and Risk Committee. There are clear instructions from the Board, Audit Committee, and Executive Management to all units to work in accordance with external and internal audit systems, and to respond to any issue or topic raised by auditors.

In 2013 the Internal Audit Department completed a number of major works:

− Reviewed and evaluated the internal control framework through implementing the approved internal audit plan.

− Reviewed quarterly and annual Enterprise Risk Reports of Ooredoo Qatar and the Group and assessed the effectiveness of plans to reduce these risks.

− Complied with the Internal Audit Manual based on the International Standards for the Professional Practice of Internal Auditing to provide practical guidance throughout the internal audit activity.

− Reviewed the quarterly Internal Audit reports for Group companies.

− Reviewed Internal Audit plans for Group companies.

− Coordinated between External Auditors, Audit Bureau Qatar, and management.

− Supported operating companies’ internal audit functions.

To ensure transparency and credibility, an investigation is held to look into any matters that draw the attention of the internal auditor, external auditor, or finance team, based on the nature of those issues.

Supervising and controlling the Group Monitoring and supervision at Group level has separate lines for strategy and financial control in a full review in each of the operating companies. This is done according to a regular cycle of visits and meetings of the executive management of the Group with the executive management of the operating companies, supported by a specific schedule for reports on internal performance. This detailed inspection of the performance of each operating company is considered a primary source of information, provided to shareholders through quarterly or annual reports. In addition, the Group has a vision for the decisions and actions of the Board of Directors and audit committee of each operating company.

62

Control and surveillance measures vary in each operating company, reflecting the delegation of powers to the Board of Directors and executive management of each of the companies, but all companies at Group level are required to issue reports according to what is expected from them. The process of unifying the Audit Committee charters will ensure that overseeing the system of internal control is delegated to audit committees in line with international best practice.

Risk management and internal control Ooredoo has established a system for overseeing, managing, and controlling internal risks to protect the Company’s investments and operations inside and outside Qatar. This system is designed to:

− Identify, assess, monitor, and manage risks; and

− Inform the Ooredoo Board of material changes to Ooredoo’s risk profile.

The Board is responsible for establishing the risk management system and for reviewing the effectiveness of its implementation in Ooredoo and its Group. Management is responsible for systematically identifying, assessing, monitoring, and managing material risks throughout the organisation. This system includes the Company’s internal compliance and control systems.

In addition, the Company has tight controls and well-established systems that control its transactions and relationships with related parties.

Ooredoo Group implements a risk management policy at Group level, where it states that the Group’s Board of Directors, supported by Audit Committee and Internal Audit Department, will annually review all risks that Ooredoo and its subsidiaries might face. Identifying risks that might face any of the operating companies is the responsibility of its executive management and employees. The Group’s Risk Management examines the risk ratings determined, and the action plans to address these risks.

In undertaking the above, Internal Audit provides support to risk management in the Group. The risk-pooling and actions planned to be taken to mitigate the effects of risks are set out in the existing procedures for the annual strategic planning of the Group. Measures for identifying and managing risks vary between operating companies, but they are now being standardised, starting with reviewing and amending Audit Committee charters in operating companies to ensure that audit committees are permanently assigned to oversee risk management in Ooredoo’s subsidiaries.

High-level financial measurements are collected at Group level according to recurring timetables, monthly, quarterly, or yearly depending on the details required. These measurements provide an indication of the risks faced by each operating company, with special attention to issues of cash and funding needs, as well as preparedness to deal with the unexpected. The Company is currently updating its methods so it can collect more detailed data about risk management. The Company has already started to study offers from developers of automated systems that can be used at Group level to collect and manage risk databases that have been identified, and procedures to address them. The Department works on analysing risk management efficiency in Ooredoo, in addition to internal compliance and control systems and their efficiency.

Company’s adherence to internal and external audit systems The Company has appointed an external auditor and is working on adherence to internal and external audit systems. There are decisions and clear instructions from the Board of Directors, Audit Committee, and senior executive management that emphasise the necessity for all sectors and departments of the Company to adhere to internal and external audit, and deal with all cases identified by the auditors.



With regard to technical and accounting reports, some observations are contained in the reports of the Internal Auditor, External Auditor, and the Audit Bureau. These are being dealt with as appropriate.

Also, the Company has a policy to ensure staff protection and confidentiality in the event of informing them of any suspicious transactions. This policy has been included as part of the Code of Ethics and Business Conduct.

Availability of information The Company guarantees for all shareholders the right to review all relevant information and disclosures through its website and annual reports that are made available to all shareholders. Shareholders can access all information relating to Board members and their qualifications, including the number of shares they own in the Company, their presidencies or membership on the boards of directors of other companies, as well as information on executive management of the Company. All shareholders are entitled to access to all relevant information.

In Article (48) of the Company’s Articles of Association, the rights of minority shareholders have been implicitly provided for: “resolutions of the General Assembly issued in accordance with the Company’s Articles shall be binding to all including the absent ones, offenders in the opinion, incompetent or under-capacity”.

Dividend policy Profits are distributed upon a recommendation by the Board of Directors and a decision of the General Assembly of the Company in its ordinary annual meeting, in compliance with Article 53 of the Articles of Association of the Company.

Shareholder recordsSubject to the provisions of Article 10 of the Company’s Articles of Association, Article 159 of the Commercial Companies Law No. (5) for 2002, and Article 10 of the Corporate Governance Code issued by the Qatar Financial Markets Authority and at the direction of Qatar Exchange, the Company keeps true, accurate, and up-to-date records of the Company’s shareholders via the central system for shareholders, run by the Stock Exchange.

Any shareholder or any related parties can look at the shareholders’ register, and obtain all relevant information.

Major shareholdersCountry Number of shares Percentage

Qatar Holding Company Qatar 165,580,842 51.7%General Retirement and Social Insurance Authority

Qatar 40,062,110 12.5%

Abu Dhabi Investment Council United Arab Emirates 32,031,994 10.0%General Military Retirement and Social Insurance Authority

Qatar 5,119,892 1.6%

Shares held by members of the BoardBoard member name Country Number of shares Benef iciary name

Hamad Saeed Al Badi United Arab Emirates 12,012 Hamad Saeed Al BadiHareb Masoud Al Darmaki United Arab Emirates 16,013 Hareb Masoud Al Darmaki

64

Fair treatment of shareholders and voting rightsAccording to the provisions of Article 16 of the Company’s Articles of Association, which states that “each share shall give its holder equal proprietary rights as other shareholders, without any discrimination, in the Company’s assets and equal rights to receive dividends as herein-after provided”, the dividend will be distributed to the shareholders.

According to the provisions of Article 38 of the Company’s Articles of Association, each shareholder has the right to attend the General Assembly, either personally or by proxy.

Employees of the CompanyThe human resources policy adopted and applied by the Company is prepared in accordance with the provisions of the Labour Law No. 14 of 2004, and related ministerial decisions which serve the interests of the Company and its employees, and takes into account at the same time the principles of justice, equality, and non-discrimination on the basis of sex, race, or religion.

The Company’s achievements During 2013, the Company launched various initiatives to deepen its relation with customers and create new ways to provide customers with benefits, experiences, and new services in their daily life, wherever they are.

Among the Company’s other major achievements was the rapid progress in launching its new brand: “Ooredoo”. The brand was launched in February 2013 during the Mobile World Congress, held in Barcelona.

Ooredoo had the centre stage during 2013 in providing state-of-the-art telecommunication networks. It was the first company to provide 4G communications in three markets in the Middle East, North Africa: Qatar, Kuwait, and Oman.

Providing 4G services has made it possible for our clients to use mobile broadband wherever they are, which significantly improves the way they can take advantage of mobile services to enrich their lives.

The Company also launched 4G services in the Maldives, and in Indonesia, where Ooredoo company Indosat became the first telecom operator in Indonesia to operate a UMTS 900 MHz network during 2013. As part of its strategy to develop and modernise its networks, Ooredoo extended its 3G telecommunication network in Tunisia this year, in addition to launching 3G services in Algeria in December 2013.

As part of the Company’s expansion, 2013 witnessed Ooredoo winning one of two mobile services operator licences in Myanmar, following fierce competition on a governmental offer. Myanmar is a country with one of lowest the rates of mobile penetration in the world. Ooredoo is paving the way for building a new network of next-generation networks for mobile communication in Myanmar. Ooredoo will provide easy and user-friendly telecommunications services to customers for a population of more than 65 million people.

In Iraq, Ooredoo subsidiary Asiacell put forward a primary offering of its shares in the Iraq stock market in Baghdad, which gave Iraqi nationals the opportunity to benefit from holding Asiacell shares.

Furthermore, in January the Company issued bond offerings for 15 years and 30 years (worth $1 billion), and in December issued its first Sukuk as Islamic instruments worth $1.25 billion. Ooredoo’s issuance of those bonds and instruments means that the Company continues to enjoy a well-funded position, which enables it to continue to implement its growth strategy in the various international assets it owns in the telecommunications sector.


Financial Review

Financial Review

52% State of Qatar10% Abu Dhabi Investment Authority21% Others17% Other Qatari government

related entities

Company ownership profileShare price performance1 January 2012 – 31 December 2013

150

140

130

120

110

100

90

80Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ooredoo (Ticket ORDS)

DSM Index

2013 financial and operating highlights

2013 2012

% change2012 to

2013 2011

% change2011 to

2013

Operations

Revenue QR millions 33,851 33,476 1% 31,745 7%

EBITDA QR millions 14,640 15,567 -6% 14,796 -1%

EBITDA margin Percentage 43% 47% 47%

Net profit attributable to Ooredoo shareholders QR millions 2,579 2,947 -12% 2,606 -1%

Earnings per share (EPS) – basic and diluted QR 8.05 9.89 9.90

Cash dividend declared per share QR 4.00 5.00 3.00

Cash dividend payout ratio (Note A) Percentage 50% 54% 20%

Operational cash flow QR millions 11,535 11,817 -2% 7,910 46%

Capital expenditure QR millions 9,298 7,316 27% 6,575 41%

Employees Number 16,971 17,130 -1% 16,657 2%

Financial position

Total net assets QR millions 32,427 36,732 -12% 39,393 -18%

Net debt (Note B) QR millions 28,784 28,401 1% 27,268 6%

Net debt to EBITDA Multiples 2.1 1.9 1.9

Free cash flow (Note C) QR millions 1,658 4,951 -67% 4,869 -66%

Market capitalisation QR millions 43,948 33,313 32% 24,781 77%

Customers

Wireless postpaid (incl. wireless broadband) Thousands 3,809 3,489 9% 2,957 29%

Wireless prepaid Thousands 91,310 88,591 3% 79,584 15%

Fixed line (incl. fixed wireless) Thousands 782 848 -8% 811 -4%

Total customers Thousands 95,901 92,928 3% 83,352 15%

Value

reba

sed

to o

ne h

undr

ed

68

Free cash flowAmount in QR millions (Note C)

Total customersThousands

Proportional customersThousands(Note E)

237

1,6

58

4,8

69

4,9

51

65,

869

2009

2010

2011

2012

2013

62,

715

47,

903

41,

697

33,

525

95,

901

2009

2010

2011

2012

2013

92,

928

83,

352

74,

140

60,

401

3,3

80

2009

2010

2011

2012

2013

Investor relationsOoredoo’s investor relations activities are intended to promote understanding of the company by its shareholders, investors and other market participants, encourage them to properly assess the company’s value, and provide feedback on market opinions to the management of Ooredoo.

Key areas of focus:• The delivery of timely and accurate information;• Ensuring disclosure, transparency and governance practices continue to be enhanced and region leading; and • Proactive investor outreach and management access via conferences, roadshows, calls, and regular meetings.

Dividend policyOoredoo Q.S.C. has a stated strategy of expanding organically and inorganically within key geographies and strategic lines of business. A key tenet of this strategy is ensuring flexibility for the company in declaring dividend distributions. This flexibility allows Ooredoo to balance the demands of its growth strategy while still maintaining sufficient reserves and liquidity to address operational and financial needs. As a result, dividends will vary from year to year.

Note A Dividend payout ratio = cash dividend / net profit due to Ooredoo shareholders. In addition, a 30 percent bonus was issued in 2011.Note B Net debt = total loans and borrowings + contingent liabilities (letters of guarantee + letters of credit + finance lease + vendor financing) less cash

(net of restricted cash and cash held in banks below BBB+ rating).Note C Free cash flow = net profit plus depreciation and amortisation less capex; net profit adjusted for extraordinary items.Note D Short term debt includes debt with a maturity of less than twelve months.Note E Proportional customers represent the customers for each operating company, multiplied by the effective stake in that operating company.

EBITAmount in QR millions

Total group debt Amount in QR millions (Note D)

Net debtAmount in QR millions (Note B)

7,95

5

7,80

6

6,14

7

5,7

47 6,

977

2009

2010

2011

2012

2013

28,

401

27,

268

22,

740

25,

685

28,

784

2009

2010

2011

2012

2013

39,7

6546,3

87

46,8

52

36,0

86

45,7

69

2009

2010

2011

2012

2013

Long term

Short term

1.9

1.9

2.3

2.1

1.8

Net Debt/EBITDA


Consolidated Financial Statements

Consolidated Financial Statements

Contents73 IndependentAuditors’Report74 ConsolidatedStatementofProfitorLoss75 Consolidated Statement of Comprehensive Income76 Consolidated Statement of Financial Position78 Consolidated Statement of Cash Flows80 Consolidated Statement of Changes in Equity82 Notes to the Consolidated Financial Statements

ToThe shareholdersOoredoo Q.S.C. (formerly known as Qatar Telecom (Qtel) Q.S.C.)Doha, State of Qatar

Report on the consolidated financial statementsWe have audited the accompanying consolidated financial statements of Ooredoo Q.S.C. (formerly known as Qatar Telecom (Qtel) Q.S.C.) (“the Company”) and its subsidiaries (together referred to as “the Group”), which comprise the consolidated statement of financial position as at 31 December 2013, the consolidated statements of profit or loss, comprehensive income, cash flows and changes in equity for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ responsibility for the consolidated financial statementsDirectors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2013, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of matterWithout qualifying our opinion, we draw attention to note 33 (c) to the consolidated financial statements, which describes the nature of an ongoing lawsuit relating to a subsidiary of the Group. Legal proceedings related to the lawsuit are in progress and the ultimate outcome of the matter cannot presently be determined.

Report on other legal requirementsWe have obtained all the information and explanation which we considered necessary for the purpose of our audit. The Group has maintained proper accounting records and the consolidated financial statements are in agreement therewith. A physical count of inventory has been conducted in accordance with the established principles. We have reviewed the accompanying report of the Board of Directors and confirm that the financial information contained thereon is consistent with the books and records of the Group. We are not aware of any violations of the provisions of Qatar Commercial Companies Law No 5 of 2002 or the terms of Company’s Articles of Association having occurred during the year which might have had a material adverse effect on the business of the Company or consolidated financial position of the Group as of 31 December 2013.

4 March 2014 Gopal BalasubramaniamDoha, State of Qatar KPMG Qatar Auditors Registration No. 251

Independent Auditors’ Report KPMGAudit

2nd Floor, Area 25, C Ring RoadPO Box 4473, Doha, State of QatarTelephone +974 4457 6444Fax +974 4442 5626Website www.kpmg.com.qa


Note 2013 2012QR’000 QR’000

(Restated)

Continuing operationsRevenue 5 33,851,340 33,475,609

Operating expenses 6 (11,084,389) (10,363,051)Selling, general and administrative expenses 7 (8,225,083) (7,579,728)Depreciation and amortisation 8 (7,662,849) (7,612,457)Net finance costs 9 (2,020,882) (1,921,006)Impairment of financial assets 14(ii) (41,638) (427,465)Other (expense)/income – net 10 (684,748) 522,152Share of results of associates – net of tax 16 97,869 34,621Royalties and fees 11 (334,474) (315,995)

Profit before income taxes 3,895,146 5,812,680Income tax 19 (611,889) (977,154)

Profit from continuing operations 3,283,257 4,835,526Discontinued operationProfit/(loss) from discontinued operation – net of tax 41 10,073 (181,038)

Profit for the year 3,293,330 4,654,488

Profit attributable to: Shareholders of the parent 2,578,657 2,946,567 Non-controlling interests 714,673 1,707,921

3,293,330 4,654,488

Basic and diluted earnings per share(Attributable to shareholders of the parent) (Expressed in QR per share) 12 8.05 9.89

The attached notes 1 to 43 form part of these consolidated financial statements

Consolidated Statement of Prof it or LossYear ended 31 December 2013

74

Note 2013 2012QR’000 QR’000

(Restated)

Profit for the year 3,293,330 4,654,488

Other comprehensive income Items that may be reclassified subsequently to profit or lossNet change in fair value of available-for-sale investments 25 231,204 135,013Effective portion of changes in fair value of cash flow hedges 25 903 326,528Net changes in fair value of employee benefit reserve 25 237,111 (92,616)Share of other comprehensive income of associates 25 2,843 1,443Foreign currency translation differences 25 (3,097,213) (1,343,894)

Other comprehensive income for the year – net of tax (2,625,152) (973,526)

Total comprehensive income for the year 668,178 3,680,962

Total comprehensive income attributable to: Shareholders of the parent 552,327 2,470,591 Non-controlling interests 115,851 1,210,371

668,178 3,680,962

Consolidated Statement of Comprehensive IncomeYear ended 31 December 2013



Consolidated Statement of Financial PositionAt 31 December 2013

Note 2013 2012QR’000 QR’000

(Restated)

ASSETS

Non-current assetsProperty, plant and equipment 13 32,315,832 32,436,114Intangible assets and goodwill 14 31,473,769 34,746,171Investment property 15 60,363 66,459Investment in associates 16 1,752,172 1,873,384Available-for-sale investments 17 2,704,493 2,633,650Other non-current assets 18 697,244 908,160Deferred tax assets 19 50,703 74,581

Total non-current assets 69,054,576 72,738,519

Current assetsInventories 20 537,311 358,767Trade and other receivables 21 7,144,061 6,095,508Bank balances and cash 22 20,304,571 15,006,026Assets held for distribution 41 375,136 6,504

Total current assets 28,361,079 21,466,805

TOTALASSETS 97,415,655 94,205,324

EQUITYShare capital 23 3,203,200 3,203,200Legal reserve 24 (a) 12,434,282 12,434,282Fair value reserve 24 (b) 1,326,369 1,084,494Employment benefit reserve 24 (c) 43,165 (110,958)Translation reserve 24 (d) (1,665,232) 757,096Other statutory reserves 24 (e) 980,788 825,245Retained earnings 8,645,312 9,442,505

Equity attributable to shareholders of the parent 24,967,884 27,635,864Non-controlling interests 7,459,448 9,095,772

Total equity 32,427,332 36,731,636


76

Note 2013 2012QR’000 QR’000

(Restated)

LIABILITIES

Non-current liabilitiesLoans and borrowings 26 37,254,452 32,018,641Employees benefits 27 696,964 928,385Deferred tax liabilities 19 879,216 1,370,136Other non-current liabilities 28 2,625,857 2,676,470

Total non-current liabilities 41,456,489 36,993,632

Current liabilitiesLoans and borrowings 26 8,057,873 7,307,914Trade and other payables 29 12,673,203 10,971,994Deferred income 1,739,333 1,658,471Income tax payable 561,122 505,019Liabilities held for distribution 41 500,303 36,658

Total current liabilities 23,531,834 20,480,056

Total liabilities 64,988,323 57,473,688

TOTALEQUITYANDLIABILITIES 97,415,655 94,205,324

Abdullah Bin Mohamed Bin Saud Al-Thani Ali Shareef Al-EmadiChairman Deputy Chairman



Note 2013 2012QR’000 QR’000

(Restated)

OPERATINGACTIVITIESProfit before income taxes 3,895,146 5,812,680Profit/(loss) from discontinued operation 41 10,073 (181,038)Adjustments for: Depreciation and amortization 7,750,832 7,784,235 Dividend income 10 (43,851) (84,141) Impairment of financial assets 14(ii) 41,638 427,465 (Gain)/loss on disposal of available-for-sale investments 10 (84,065) 2,068 Gain on disposal of property, plant and equipment (64,527) (468,399) Loss on sale of a subsidiary 41 1,071 – Net finance costs 2,021,028 1,923,093 Provision for employees’ benefits 299,392 110,585 Provision for trade receivables 209,589 213,088 Share of results of associates – net of tax 16 (97,869) (34,621)

Operating profit before working capital changes 13,938,457 15,505,015Working capital changes: Change in inventories (184,580) (5,705) Change in trade and other receivables (1,169,385) (491,012) Change in trade and other payables 2,027,835 139,576

Cash from operations 14,612,327 15,147,874Finance costs paid (2,088,862) (2,379,098)Employees’ benefits paid 27 (129,884) (139,100)Income taxes paid (858,947) (812,858)

Net cash from operating activities 11,534,634 11,816,818

Consolidated Statement of Cash FlowsYear ended 31 December 2013


78

Note 2013 2012QR’000 QR’000

(Restated)

INVESTINGACTIVITIESAcquisition of property, plant and equipment 13 (9,297,933) (7,315,716)Acquisition of intangible assets 14 (493,731) (941,395)Net cash outflows from acquisition of a subsidiary – (111,932)Additional investment in an associate – (377)Acquisition of available-for-sale investments (18,601) (126,768)Proceeds from disposal of property, plant and equipment 517,520 852,405Proceeds from disposal of available-for-sale investments 183,594 140,120Proceeds from disposal of a subsidiary 510 – Movement in restricted deposits (90,626) (10,843)Movement in other non-current assets 98,861 (26,753)Dividend received 70,223 84,141Interest received 282,908 503,488

Net cash used in investing activities (8,747,275) (6,953,630)

FINANCINGACTIVITIESProceeds from right shares issued – 6,855,345Proceeds from loans and borrowings 16,141,243 9,784,683Repayment of loans and borrowings (9,010,541) (16,084,719)Acquisition of non-controlling interest (2,185,257) (11,804,684)Additions to deferred financing costs 26 (156,063) (138,141)Dividend paid to shareholders of the parent (1,601,600) (528,000)Dividend paid to non-controlling interests (1,160,762) (738,335)Movement in other non-current liabilities (10,195) 1,351,185

Netcashfrom/(usedin)financingactivities 2,016,825 (11,302,666)

Net Change in Cash and Cash Equivalents 4,804,184 (6,439,478)Effect of exchange rate fluctuations 598,553 189,672Cash and cash equivalents at 1 January 14,801,082 21,050,888

Cash and Cash Equivalents at 31 December 22 20,203,819 14,801,082



Note Sharecapital

Legal reserve

Fair value reserve

Employee benefit reserve

Translation reserve

Other statutory reserves

Retained earnings Total Non-controlling

interests Total equity

Attributable to shareholders of the parent QR’000 QR’000

QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000

At 1 January 2013 (Restated) 3,203,200 12,434,282 1,084,494 (110,958) 757,096 825,245 9,442,505 27,635,864 9,095,772 36,731,636Profit for the year – – – – – – 2,578,657 2,578,657 714,673 3,293,330Other comprehensive income – – 241,875 154,123 (2,422,328) – – (2,026,330) (598,822) (2,625,152)

Total comprehensive income for the year – – 241,875 154,123 (2,422,328) – 2,578,657 552,327 115,851 668,178Transactions with shareholders of the Parent, recognised directly in equityDividend for 2012 30 – – – – – – (1,601,600) (1,601,600) – (1,601,600)Transfer to other statutory reserves – – – – – 155,543 (155,543) – – –Transactions with non-controlling interest, recognised directly in equityAcquisition of non-controlling interests 4.1 – – – – – – (1,590,459) (1,590,459) (592,669) (2,183,128)Acquisition of non-controlling interests – – – – – – (3,385) (3,385) 1,256 (2,129)Dilution of ownership interest – – – – – – 9,375 9,375 – 9,375Dividend paid – – – – – – – – (1,160,762) (1,160,762)Transactions with non-owners oftheGroupTransfer to social and sports fund – – – – – – (34,238) (34,238) – (34,238)

At 31 December 2013 3,203,200 12,434,282 1,326,369 43,165 (1,665,232) 980,788 8,645,312 24,967,884 7,459,448 32,427,332

Consolidated Statement of Changes in EquityYear ended 31 December 2013


80


Note Sharecapital

Legal reserve

Fair value reserve

Employee benefit reserve

Translation reserve

Other statutory reserves

Retained earnings Total Non-controlling

interests Total equity

Attributable to shareholders of the parent QR’000 QR’000QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000 QR’000

At 1 January 2012 1,760,000 6,494,137 672,843 – 1,586,124 706,036 9,836,707 21,055,847 18,336,947 39,392,794Impact of change in IAS 19 42 – – – (52,359) – – 7,903 (44,456) (25,772) (70,228)Recognition of non-controlling interest 42 – – – – – – (88,869) (88,869) 88,869 –

At 1 January 2012 (Restated) 1,760,000 6,494,137 672,843 (52,359) 1,586,124 706,036 9,755,741 20,922,522 18,400,044 39,322,566Profit for the year – – – – – – 2,946,567 2,946,567 1,707,921 4,654,488Other comprehensive income – – 411,651 (58,599) (829,028) – – (475,976) (497,550) (973,526)

Total comprehensive income for the year (Restated) – – 411,651 (58,599) (829,028) – 2,946,567 2,470,591 1,210,371 3,680,962Transactions with shareholders of the Parent, recognised directly in equity Dividend for 2011 30 – – – – – – (528,000) (528,000) – (528,000)Rights shares issued 915,200 5,940,145 – – – – – 6,855,345 – 6,855,345Bonus shares issued 30 528,000 – – – – – (528,000) – – –Transfer to other statutory reserves – – – – – 119,209 (119,209) – – –Transactions with non-controlling interest, recognised directly in equity Recognition of non-controlling interests – – – – – – – – 6,974 6,974

Acquisition of non-controlling interests 4.2 – – – – – – (2,046,475) (2,046,475) (9,759,698)

(11,806,173)Dividend paid – – – – – – – – (738,335) (738,335)Other movements – – – – – – – – (23,584) (23,584)Transactions with non-owners oftheGroup

Transfer to social and sports fund – – – – – – (38,119) (38,119) – (38,119)

At31December2012(Restated) 3,203,200 12,434,282 1,084,494 (110,958) 757,096 825,245 9,442,505 27,635,864 9,095,772 36,731,636

Ooredoo Annual Report 2013

81

Notes to the Consolidated Financial StatementsYear ended 31 December 2013

1 REPORTINGENTITYQatar Public Telecommunications Corporation (the “Corporation”) was formed on 29 June 1987 domiciled in the State of Qatar by Law No. 13 of 1987 to provide domestic and international telecommunication services within the State of Qatar. The Company’s registered office is located at 100 Westbay Tower, Doha, State of Qatar.

The Corporation was transformed into a Qatari Shareholding Company under the name of Qatar Telecom (Qtel) Q.S.C. (the “Company”) on 25 November 1998, pursuant to Law No. 21 of 1998.

In June 2013, the legal name of the Company was changed to Ooredoo Q.S.C. This change had been duly approved by the shareholders at the Company’s extraordinary general assembly meeting held on 31 March 2013 and the required legal and regulatory approvals have been obtained during the current year.

The Company is the telecommunications service provider licensed by the Supreme Council of Information and Communication Technology (ictQATAR) to provide both fixed and mobile telecommunications services in the state of Qatar. As a licensed service provider, the conduct and activities of the Company are regulated by ictQATAR pursuant to Law No. 34 of 2006 (Telecommunications Law) and the Applicable Regulatory Framework.

The Company and its subsidiaries (together referred to as the “Group”) provides domestic and international telecommunication services in Qatar and elsewhere in the Asia and MENA region. Qatar Holding L.L.C is the ultimate Parent Company of the Group.

2 BASISOFPREPARATIONa) Statement of complianceThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements of the Group for the year ended 31 December 2013 were authorised for issue in accordance with a resolution of the Board of Directors of the Company on 4 March 2014.

b) Basis of measurementThe consolidated financial statements have been prepared on a historical cost basis except for the following:

• Financialinstrumentsatfairvaluethroughprofitorlossaremeasuredatfairvalue;• Available-for-saleinvestmentsaremeasuredatfairvalue;• Derivativefinancialinstrumentsaremeasuredatfairvalue;and• Liabilitiesforcash-settledshare-basedpaymentarrangementsaremeasuredatfairvaluethroughprofitorloss;

The methods used to measure fair values are discussed further in note 35.

c) Functional and presentation currencyThese consolidated financial statements are presented in Qatari Riyals, which is the Company’s functional currency. All the financial information presented in Qatari Riyals has been rounded off to the nearest thousand (QR’000) except where otherwise indicated.

d) Use of estimates and judgmentsThe preparation of consolidated financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in note 37.

82

3 SIGNIFICANTACCOUNTINGPOLICIESThe consolidated financial statements comprise the financial statements of Ooredoo Q.S.C (formerly known as Qatar Telecom (Qtel) Q.S.C.) and its subsidiaries (together referred to as the “Group”). The accounting policies set out below have been applied consistently to all the periods presented in these consolidated financial statements, and have been applied consistently by the Group entities, where necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with those used by the Group.

Certain comparative amounts in the consolidated financial statements have been reclassified to conform with the current year’s presentation (see note 42). In addition, the comparative consolidated statement of profit or loss and statement of cash flow has been re-presented as if an operation discontinued during the current year had been discontinued from the start of the comparative year (see note 41).

3.1 BASISOFCONSOLIDATIONa) Business combinationsThe Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment (see note 3.4). Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

b) Non-controlling interests (“NCI”)NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

c) SubsidiariesSubsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

d) Loss of controlWhen the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(e) Interests in associatesAssociates are those entities in which the Group has significant influence, but not control or joint control.

Interests in associates are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of associates, until the date on which significant influence ceases.

f) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the investee.Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.



3 SIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)

3.1 BASISOFCONSOLIDATION(CONTINUED)

The principal subsidiaries of the Group, incorporated in the consolidated financial statements of Ooredoo Q.S.C. are as follows:

Name of subsidiaryCountry of incorporation

Group effective shareholding percentage

2013 2012

Qtel Investment Holdings S.P.C Bahrain 100% 100%Qtel International Investments L.L.C. Qatar 100% 100%Ooredoo Group L.L.C. (formerly known as Qtel Group L.L.C.) Qatar 100% 100%Qtel South East Asia Holding S.P.C Bahrain 100% 100%Qtel West Bay Holding S.P.C Bahrain 100% 100%Ooredo Asian Investments Pte. Ltd.

(formerly known as “Qatar Telecom (Asia) Pte. Ltd.”) Singapore 100% 100%Qtel Al Dafna Holding S.P.C Bahrain 100% 100%Qtel Al Khore Holding S.P.C Bahrain 100% 100%IP Holdings Limited Cayman Islands 100% 100%Qtel Gharafa Holdings Limited Cayman Islands 100% 100%wi-tribe Asia Limited Cayman Islands 100% 100%Ooredoo Asia Pte. Ltd. (formerly known as “Qatar Telecom

(Qtel Asia) Pte. Ltd.”) Singapore 100% 100%Indonesia Communications Limited Mauritius 100% 100%QTEL International Finance Limited Bermuda 100% 100%Qtel MENA Investcom S.P.C Bahrain 100% 100%Omani Qatari Telecommunications Company S.A.O.G.

(“NAWRAS”) Oman 55.0% 55.0%Starlink W.L.L. Qatar 72.5% 72.5%National Mobile Telecommunications Company K.S.C.

(“Wataniya Telecom”) Kuwait 92.1% 92.1%Wataniya International FZ – L.L.C. United Arab

Emirates 92.1% 92.1%Al-Bahar United Company W.L.L. (“Fono”) Kuwait 92.1% 92.1%Al Wataniya Gulf Telecommunications Holding Company S.P.C Bahrain 92.1% 92.1%Al-Wataniya International for Intellectual Properties S.P.C Bahrain 92.1% 92.1%Ooredoo Maldives Pvt. Ltd. Maldives 92.1% 92.1%WARF Telecom International Private Limited Maldives 59.9% 59.9%Wataniya Telecom Algerie S.P.A. Algeria 74.4% 74.4%Carthage Consortium Ltd. Malta 92.1% 92.1%Qtel Tunisia Holding Company Ltd. Malta 92.1% 92.1%Qtel Malta Holding Company Ltd. Malta 100.0% 100.0%Tunisiana S.A Tunisia 84.1% 84.1%Tunisia Network S.A Tunisia 84.1% 41.2%Public Telecommunication Company Ltd. Saudi Arabia 92.1% 92.1%Wataniya Palestine Mobile Telecommunications Public

Shareholding Company (i) Palestine 45.8% 45.8%Raywood Inc. (“Raywood”) Cayman Islands 100.0% 100.0%Newood Inc. Cayman Islands 100.0% 100.0%Midya Telecom Company Limited (“Fanoos”) (ii) Iraq 49.0% 49.0%

84


3.1 BASISOFCONSOLIDATION(CONTINUED)

Name of subsidiaryCountry of incorporation

Group effective shareholding percentage

2013 2012

Al-Rowad General Services Limited Iraq 100.0% 100.0%Asiacell Communications PJSC Iraq 64.1% 53.9%Wi-tribe Limited Cayman Islands 86.1% 86.1%Wi-tribe Limited – Jordan P.S.C. Jordan – 86.1%Wi-tribe Pakistan Limited Pakistan 86.1% 86.1%Barzan Holding Company S.P.C. Bahrain 100% 100%Laffan Holding Company S.P.C. Bahrain 100% 100%Zekreet Holding Company S.P.C. Bahrain 100% 100%Philippines Multitech Pte. Ltd. Singapore 100% 100%Bow Arken Pte. Ltd. Singapore 100% 100%Ooredoo Myanmar Limited Myanmar 100% –Al Wokaer Holding S.P.C. Bahrain 100% –Al Wakrah Holding S.P.C. Bahrain 100% –Ooredoo Tamweel Limited Cayman Islands 100% –Ooredoo IP L.L.C Qatar 100% –PT. Indosat Tbk Indonesia 65.0% 65.0%Indosat Finance Company B.V. Netherlands – 65.0%Indosat International Finance Company B.V. Netherlands – 65.0%Indosat Singapore Pte. Ltd. Singapore 65.0% 65.0%PT Indosat Mega Media Indonesia 64.9% 64.9%PT Starone Mitra Telekomunikasi Indonesia 54.7% 47.2%PT Aplikanusa Lintasarta (“Lintasarta”) (iii) Indonesia 47.0% 47.0%PT Artajasa Pembayaran Elektronis (iii) Indonesia 25.9% 25.9%Indosat Palapa Company B.V. Netherlands 65.0% 65.0%Indosat Mentari Company B.V. Netherlands 65.0% 65.0%PT Lintas Media Danawa (iii) Indonesia 32.9% 32.9%PT Interactive Vision Media Indonesia 64.9% 64.9%

(i) The Group has the power, indirectly through Wataniya Telecom by virtue of Wataniya Telecom having more than 51% of the voting interests in Wataniya Palestine Mobile Telecommunications Public Shareholding Company (“WPT”), which exposes the Group to variable return from its investment and gives ability to affect those returns through its power over WPT, hence, WPT has been considered as a subsidiary of the Group.

(ii) The Group incorporated Raywood Inc (“Raywood”), a special purpose entity registered in Cayman Islands with 100% (2012: 100%) voting interest held by the Group to carry out investment activities in Iraq. Raywood acquired 49% voting interest of Midya Telecom Company Limited (“MTCL”) in Iraq. The group is exposed to variable return from its investment and gives ability to affect those returns through its power over MTCL, Iraq by virtue of the shareholders’ agreement entered into between Raywood and MTCL, Iraq, hence, MTCL, Iraq has been considered as a subsidiary of the Group.

(iii) The Group has the power, indirectly through PT Indosat Tbk (“Indosat “) by virtue of Indosat having more than 51% of the voting interest or control in these companies, to which exposes the Group to variable return from its investment and gives ability to affect those returns through its power over them, hence, these companies have been considered as subsidiaries of the Group.




3.2 CHANGESINACCOUNTINGPOLICIESANDDISCLOSURESThe accounting policies adopted are consistent with those of the previous financial year, except for the new and amended IAS, IFRS and IFRIC interpretations effective as of 1 January 2013. The following standards, amendments and interpretations, which became effective 1 January 2013, are relevant to the Group:

Standard/Interpretation Content

IAS 1 (amendment) Presentation of items of other comprehensive income IAS 28 Investment in Associates and Joint VenturesIAS 19 (amendment) Employee benefits (2011) IFRS 7 (amendment) Disclosures – Offsetting Financial Assets and Financial LiabilitiesIFRS 10 & IAS 27 Consolidated financial statements and Separate Financial StatementsIFRS 11 Joint ArrangementsIFRS 12 Disclosure of interests in other entities IFRS 13 Fair Value measurement

a) IAS 1 (amendment) – Presentation of items of other comprehensive incomeThe amendments to IAS 1 require that an entity present separately the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would never be reclassified to profit or loss. The amendment is effective for annual periods beginning after 1 July 2012 with an option of early application.

The Group does not expect to have a significant impact on the consolidated financial statements on adoption of this amendments.

b) IAS 28 (2011) – Investment in Associates and Joint Ventures• Associates held for sale: IFRS 5 Non-current Assets Held for Sale and Discontinued Operations applies to an

investment, or a portion of an investment, in an associate or a joint venture that meets the criteria to be classified as held for sale. For any retained portion of the investment that has not been classified as held for sale, the entity applies the equity method until disposal of the portion held for sale. After disposal, any retained interest is accounted for using the equity method if the retained interest continues to be an associate or a joint venture, and

• Oncessationofsignificantinfluenceorjointcontrol,evenifaninvestmentinanassociatebecomesaninvestmentin a joint venture or vice versa, the entity does not re-measure the retained interest.

The Group does not expect to have a significant impact on the consolidated financial statements on adoption of this amendments.

c) IAS 19 – Employee benefits (2011) (amendment)IAS 19 (2011) changes the definition of short-term and other long-term employee benefits to clarify the distinction between the two.

The Group does not expect to have a significant impact on the consolidated financial statements on adoption of this amendment.

d) IFRS 7 (amendment) – Disclosures – Offsetting financial assets and financial liabilities (2011) IFRS 7 introduces disclosures about the impact of netting arrangements on an entity’s financial position. Based on the new disclosure requirements the Group will have to provide information about what amounts have been offset in the statement of financial position and the nature and extent of rights of set off under master netting arrangements or similar arrangements.

The Group does not expect to have a significant impact on the consolidated financial statements on adoption of this amendment.

86

3 SIGNIFICANTACCOUNTINGPOLICIES (CONTINUED)

3.2 CHANGESINACCOUNTINGPOLICIESANDDISCLOSURES (CONTINUED)

e) IFRS 10 – Consolidated financial statements and IAS 27 Separate Financial Statements (2011)IFRS 10 introduces a single control model to determine whether an investee should be consolidated. IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities. This new control model focuses on whether the Group has power over an investee, exposure or rights to variable returns from its involvement with the investee and ability to use its power to affect those returns.

In accordance with the transitional provisions of IFRS 10 (2011), the Group has amended its accounting policy on consolidation in line with requirements of IFRS 10 and has re-assessed its consolidation conclusion. (See note 3.1).

f) IFRS 11 – Joint ArrangementsIFRS 11 replaces the parts of previously existing IAS 31 Interests in Joint Ventures that dealt with joint ventures. IFRS 11 requires that interests in joint arrangements be classified as either joint operations (if the Group has rights to the assets, and obligations for the liabilities, relating to an arrangement) or joint ventures (if the Group has rights only to the net assets of an arrangement. When making this assessment, the Group has to consider the structure of the arrangements and other facts and circumstances.

The Group is not expecting a significant impact from the adoption of this standard.

g) IFRS 12 – Disclosures of interests in other entitiesIFRS 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. It requires the disclosure of information about the nature, risks and financial effects of these interests.

As a result of IFRS 12, the Group has expanded its disclosures about its interests in subsidiaries and other structured entities. Refer to note 38.

h) IFRS 13 Fair Value MeasurementIFRS 13 provides a single source of guidance on how fair value is measured, and replaces the fair value measurement guidance that is currently dispersed throughout IFRS. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7.

As a result, the Group has included additional disclosures in this regard. Please refer to note 35. In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group’s assets and liabilities.

The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Group, however, requires specific disclosures on fair values which has been disclosed by the Group in the note.

i) Improvements to IFRS (2011)Improvements to IFRS issued in 2011 contained numerous amendments to IFRS that the IASB considers non-urgent but necessary. ‘Improvements to IFRS’ comprise amendments that result in accounting changes to presentation, recognition or measurement purposes, as well as terminology or editorial amendments related to a variety of individual IFRS standards. There were no significant changes to the current accounting policies of the Company as a result of these amendments.




3.3 IASBSTANDARDSANDINTERPRETATIONSISSUEDNOTYETEFFECTIVEThe following standards and interpretations have been issued and are expected to be relevant to the Group in future periods, with effective dates on or after 1 January 2014:

Standard/Interpretation Content Effective date

IFRS 9 Financial Instruments Not specifiedIAS 19R (amendment) Employee Benefits 1 January 2014IAS 32 (amendment) Offsetting financial assets and financial liabilities (2011) 1 January 2014IAS 39 (amendment) Novation of Derivatives and Continuation of Hedge Accounting (2013) 1 January 2014IAS 36 (amendment) Recoverable amount disclosures for non-financial assets 1 January 2014IFRIC 21 Levies 1 January 2014

New standards, amendments and interpretations issued but not yet effectiveA number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2014, and have not been applied in preparing these consolidated financial statements. Those which are relevant to the Group are set out below. The Group does not plan to early adopt these standards.

a) IFRS 9 – Financial InstrumentsThe IFRS 9 (2009) requirements represent a significant change from the existing requirements in IAS 39 in respect of financial assets. The standard contains two primary measurement categories for financial assets: amortised cost and fair value. A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset’s contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of held to maturity, available-for-sale and loans and receivables.

For an investment in an equity instrument which is not held for trading, the standard permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognised in other comprehensive income would ever be reclassified to profit or loss at a later date. However, dividends on such investments are recognised in profit or loss, rather than other comprehensive income unless they clearly represent a partial recovery of the cost of the investment. Investments in equity instruments in respect of which an entity does not elect to present fair value changes in other comprehensive income would be measured at fair value with changes in fair value recognised in profit or loss.

The standard requires that derivatives embedded in contracts with a host that is a financial asset within the scope of thestandardarenotseparated;insteadthehybridfinancialinstrumentisassessedinitsentiretyastowhetheritshouldbe measured at amortised cost or fair value.

IFRS 9 (2010) introduces a new requirement in respect of financial liabilities designated under the fair value option to generally present fair value changes that are attributable to the liability’s credit risk in other comprehensive income rather than in profit or loss. Apart from this change, IFRS 9 (2010) largely carries forward without substantive amendment the guidance on classification and measurement of financial liabilities from IAS 39.

IFRS 9 (2013) introduces a new general hedge accounting standard which would align hedge accounting more closely with risk management. The requirements also establish a more principles-based approach to hedge accounting and address inconsistencies and weaknesses in the hedge accounting model in IAS 39. The new standard does not fundamentallychangethetypesofhedgingrelationshipsortherequirementstomeasureandrecognizeineffectiveness;however, more judgement would be required to assess the effectiveness of a hedging relationship under the new standard.

The mandatory effective date of IFRS 9 is not specified but will be determined when the outstanding phases are finalised. However, application of IFRS 9 is permitted.. The IASB decided to consider making limited amendments to IFRS 9 to address practice and other issues. The Group has commenced the process of evaluating the potential effect of this standard but is awaiting finalisation of the limited amendments before the evaluation can be completed.

Given the nature of the Group’s operations, this standard is not expected to have a significant impact on the Group’s financial statements.

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3.3 IASBSTANDARDSANDINTERPRETATIONSISSUEDNOTYETEFFECTIVE(CONTINUED)

b) Amendments to IAS 32 on offsetting financial assets and financial liabilities (2011)Offsetting Financial Assets and Financial Liabilities (amendments to IAS 32) clarify the offsetting criteria IAS 32 by explaining when an entity currently has a legally enforceable right to set off and when gross settlement is equivalent to net settlement.

The amendments are effective for annual periods beginning on or after 1 January 2014 and interim periods within those annual periods. Earlier application is permitted.

The Group is not expecting a significant impact from the adoption of these amendments.

c) Novation of derivatives and continuation of hedge accounting (2013)Novation of Derivatives and Continuation of Hedge Accounting – Amendments to IAS 39 provides relief from discontinuing hedge accounting if certain criteria are met

The amendments are effective for annual periods beginning on or after 1 January 2014. Early application is permitted. Although the amendments are applied retrospectively, if an entity had previously discontinued hedge accounting as a result of a novation, the previous hedge accounting (pre-novation) for that relationship cannot be reinstated.


d) Amendments to IAS 36 on recoverable amount disclosures for non-financial assetsRecoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) have expanded disclosures of recoverable amounts when the amounts are based on fair value less costs of disposals and impairment is recognized.

The amendments are effective for annual periods beginning on or after 1 January 2014. Earlier application is permitted. An entity shall not apply those amendments in periods (including comparative periods) in which it does not also apply IFRS 13.


e) IFRIC 21 on leviesIFRIC 21 on Levies (amendments to IAS 32) provide guidance on the accounting for levies in the financial statements of the entity that is paying the levy.

The Interpretation is effective for annual periods beginning on or after 1 January 2014 and is applied retrospectively. Earlier application is permitted.


3.4 SUMMARYOF6SIGNIFICANTACCOUNTINGPOLICIESRevenueRevenue represents the fair value of consideration received or receivable for communication services and equipment sales net of discounts and sales taxes. Revenue from rendering of services and sale of equipment is recognised when it is probable that the economic benefits associated with the transaction shall flow to the Group and the amount of revenue and the associated costs can be measured reliably.

The Group principally obtains revenue from providing telecommunication services comprising access charges, airtime usage, messaging, interconnect fee, data services and infrastructure provision, connection fees, equipment sales and other related services.The specific revenue recognition criteria applied to significant elements of revenue are set out below:

Revenue from rendering of servicesRevenue for access charges, airtime usage and messaging by contract customers is recognised as revenue as services are performed with unbilled revenue resulting from services already provided accrued at the end of each period and unearned revenue from services to be provided in future periods deferred. Subscription fee is recognised as revenue as the services are provided.




3.4 SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)

Revenue(continued)

Interconnection revenueRevenues from network interconnection with other domestic and international telecommunications carriers are recognised based on the actual recorded traffic minutes.

Sales of prepaid cardsSale of prepaid cards is recognised as revenue based on the actual utilisation of the prepaid cards sold. Sales relating to unutilised prepaid cards are accounted as deferred income. Deferred income related to unused prepaid cards is recognised as revenue when utilised by the customer or upon termination of the customer relationship.

Third party projectsNetwork infrastructure projects undertaken on behalf of third parties is measured at costs incurred plus profits recognized to date less progress billings and recognized losses.

In the statement of financial position, projects in progress for which costs incurred plus recognized profits exceed progress billings and recognized losses are presented as trade and other receivables. Advances received from customers are presented as deferred income/revenue.

Sales of equipmentRevenue from sales of peripheral and other equipment is recognised when the significant risks and rewards of ownership are transferred to the buyer which is normally when the equipment is delivered and ‘accepted by the customer.

Loyalty programThe group has a customer loyalty programme whereby customers are awarded credits (“Points”) based on the usage of products and services, entitling customers to the right to redeem the accumulated points via specified means. The fair value of the consideration received or receivable in respect of the initial sale is allocated between the Points and the other components of sale. The amount allocated to Points is estimated by reference to the fair value of the right to redeem it at a discount for the products of the Group or for products or services provided by third parties. The fair value of the right to redeem is estimated based on the amount of discount, adjusted to take into account the expected forfeiture rate. The amount allocated to Points is deferred and included in deferred revenue. Revenue is recognised when these Points are redeemed and the Group has fulfilled its obligations to the customer. The amount of revenue recognised in those circumstances is based on the number of Points that have been redeemed, relative to the total number of Points that is expected to be redeemed. Deferred revenue is also released to revenue when it is no longer considered probable that the Points will be redeemed.

Investment property rental incomeRental income from investment property is recognised as revenue on a straight-line basis over the term of the lease. Rental income from other property is recognised as other income. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

LicenceandspectrumfeesAmortisation periods for licence and spectrum fees are determined primarily by reference to the unexpired licence period, the conditions for licence renewal and whether licences are dependent on specific technologies.

Amortisation is charged to the statement of profit or loss on a straight-line basis over the estimated useful lives from the commencement of service of the network.

The Group is dependent on the licenses that each operating company holds to provide their telecommunications services.

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LeasesLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessorThe amounts due from lessees under finance leases are recorded as receivables at the amount of Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of leases.

Revenues from the sale of transmission capacity on terrestrial and submarine cables are recognized on a straight-line basis over the life of the contract. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

The Group as lesseeRentals payable under operating leases are charged to the consolidated statement of profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

Sale and leaseback transactions – where the Group is the lesseeA sale and leaseback transaction involves the sale of an asset by the Group and the leasing of the same asset back to the Group. The lease payments and the sale price are usually interdependent as they are negotiated as a package. The accounting treatment of a sale and leaseback transaction depends upon the type of lease involved and the economic and commercial substance of the whole arrangement.

(a) Finance leasesSale and leaseback arrangements that result in the Group retaining the majority of the risks and rewards of ownership of assets are accounted for as finance leases. Any excess of sales proceeds over the carrying amount is deferred and amortised over the lease term.

(b) Operating leasesSale and leaseback arrangements that result in substantially all of the risks and rewards of ownership of assets being transferred to the lessor are accounted for as operating leases. Any excess of sales proceeds over the carrying amount is recognised in the statement of profit or loss as gain on disposal.

Other income Other income represents income generated by the Group that arises from activities outside of the provision for communication services and equipment sales. Key components of other income are recognised as follows:

Dividend incomeDividend income is recognised when the Group’s right to receive the dividend is established.

Commission incomeWhen the Group acts in the capacity of an agent rather than as the principal in the transaction, the revenue recognised is the net amount of commission made by the Group.

TaxationSome of the subsidiaries and the joint venture are subject to taxes on income in various foreign jurisdictions. Income tax expense represents the sum of the tax currently payable and deferred tax.

Current income taxCurrent income tax assets and liabilities for the current year and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities.

The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the financial reporting year and any adjustment to tax payable in respect of previous years.





Taxation (continued)

Deferred income taxDeferred income tax is provided using the liability method on temporary differences at the end of the financial reporting year between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences, except:

• wherethedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profitorlossnortaxableprofitorloss;and

• Inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unutilised tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unutlised tax losses can be utilised except:

• wherethedeferredincometaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitialrecognitionof an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neithertheaccountingprofitorlossnortaxableprofitorloss;and

• inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterestsin joint ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each end of the financial reporting year and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each end of the financial reporting year and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the financial reporting year.

Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated statement of profit or loss.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Tax exposureIn determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Companytochangeitsjudgmentsregardingtheadequacyofexistingtaxliabilities;suchchangestotaxliabilitieswillimpact tax expense in the period that such a determination is made.

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Discontinued operationsA discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

• representsaseparatemajorlineofbusinessorgeographicalareaofoperations;• ispartofasinglecoordinatedplantodisposeofaseparatemajorlineofbusinessorgeographicalareaofoperations;or• isasubsidiaryacquiredexclusivelywithaviewtore-sale.

Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held·for·sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss or other comprehensive income is represented as if the operation had been discontinued from the start of the comparative year.

Finance income and finance costFinance income comprises interest income on funds invested, fair value gains on financial assets at fair value through profit or loss, gains on the remeasurement to fair value of any pre-existing interest in an acquire in a business combination, gains on hedging instruments that are recognised in profit or loss and reclassifications of net gains previously recognised in other comprehensive income. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, fair value losses on financial assets at fair value through profit or loss, losses on hedging instruments that are recognised in profit or loss and reclassifications of net losses previously recognised in other comprehensive income.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

Property, plant and equipmentRecognition and measurementProperty, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Assets in the course of construction are carried at cost, less any impairment.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The costs of self constructed assets include the following:

• Thecostofmaterialsanddirectlabour;• Anyothercostsdirectlyattributabletobringingtheassetstoaworkingconditionfortheirintendeduse;• Whenthegrouphasanobligationtoremovetheassetorrestorethesite,anestimateofthecostsofdismantlingandremovingtheitemsandrestoringthesiteonwhichtheyarelocated;and

• Capitalizedborrowingcosts

Cost also includes transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.





Property, plant and equipment (continued)

Transfer to investment propertyWhen the use of property changes from owner-occupied to investment property, the property is reclassified accordingly at the carrying amount on the date of transfer in accordance with cost model specified under IAS 40.

ExpenditureExpenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant and equipment. All other expenditure is recognised in the consolidated statement of profit or loss as incurred.

DepreciationItems of property, plant and equipment are depreciated on a straight line basis in profit or loss over the estimated useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.

Depreciation of these assets commences from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use. The estimated useful lives of the property, plant and equipment are as follows:

Land lease rights under finance lease 50 yearsBuildings 5 – 40 yearsExchange and networks assets 5 – 25 years Subscriber apparatus and other equipment 1 – 8 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use.

DerecognitionAn item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the consolidated statement of profit or loss in the year the asset is derecognised. The asset’s residual values, useful lives and method of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed as incurred. Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds.

GovernmentgrantsGovernment grants relating to non-monetary assets are recognised at nominal value. Grants that compensate the Group for expenses are recognised in the consolidated statement of profit or loss on a systematic basis in the same period in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in the consolidated statement of profit or loss on a systematic basis over the expected useful life of the related asset upon capitalisation.

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Intangible assets and goodwillIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the consolidated statement of profit or loss in the year in which the expenditure is incurred.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the consolidated statement of profit or loss in the expense category consistent with the nature of the intangible asset.

Research and developmentExpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognized in profit or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

Indefeasible rights of use (“IRU”)IRUs correspond to the right to use a portion of the capacity of a terrestrial or submarine transmission cable granted for a fixed period. IRUs are recognised at cost as an asset when the Group has the specific indefeasible right to use an identified portion of the underlying asset, generally optical fibres or dedicated wavelength bandwidth, and the duration of the right is for the major part of the underlying asset’s economic life. They are amortised on a straight line basis over the shorter of the expected period of use and the life of the contract which ranges between 10 to 15 years.

The useful lives of intangible assets are assessed to be either finite or indefinite.

A summary of the useful lives and amortisation methods of Group’s intangible assets other than goodwill are as follows:

License costs

Customer contracts and related customer relationship Brand/Trade names

Concession intangible assets

IRU, software and other intangibles

Useful lives Finite (10 – 50 years)

Finite (2 – 8 years)

Finite (6-25 years)

Finite (15 years)

Finite (3-15 years)

Amortisation method used:

Amortised on a straight line basis over the periods of availability





Internally generated or acquired

Acquired Acquired Acquired Acquired Acquired





Service concession arrangementsThe Group accounts for service concession arrangements where it is an operator in accordance with IFRIC 12 “Service concession arrangements”. Infrastructure within the scope of this interpretation is not recognised as property, plant and equipment of the Group as the contractual service arrangement does not convey the right to control the use of the public service infrastructure to the Group. Accordingly, the Group recognises such assets as “Concession intangible assets”. The Group recognises these intangible assets at cost in accordance with IAS 38. These intangible assets are amortised over the period in which it is expected to be available for use by the Group.

The Group recognises contract revenue and costs in accordance with IAS 11, Construction Contracts. The costs of each activity, namely construction, operation and maintenance are recognised as expenses by reference to the stage of completion of the related activity. Contract revenue, if any, i.e. the fair value of the amount due from the grantor for the activity undertaken, is recognised at the same time. The amount due from the grantor meets the definition of a receivable in IAS 39 Financial Instruments: Recognition and Measurement. The receivable is measured initially at fair value. It is subsequently measured at amortised cost.

The Group accounts for revenue and costs relating to the services in accordance with IAS 18 as described in the accounting policy for revenue recognition. Borrowing costs attributable to the arrangement are recognised as an expense in the period in which they are incurred, unless the Group has a contractual right to receive an intangible asset (a right to charge user of the public service). If the Group has a contractual right to receive an intangible asset, borrowing costs attributable to the arrangement are capitalised during the construction phase of the arrangement.

Investment propertyInvestment properties are properties held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the investment property.

When the use of a property changes such that it is reclassified as property and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

Investment properties are depreciated on straight line basis using estimated useful life of 20 years.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the statement of profit or loss in the year of retirement or disposal.

Financial instruments(i) Non-derivative financial assetsThe Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

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Financial instruments (continued)

(i) Non-derivative financial assets (continued)

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables and available-for-sale investments.

Financial assets at fair value through profit or lossA financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise bank balances and cash and trade receivables and prepayments.

Bank balances and cashBank balances and cash comprise cash on hand, call deposits and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand, call deposits and demand deposits with original maturity of less than three months.

Trade and other receivable Trade receivables and prepayments that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method less impairment.

Appropriate allowances for estimated irrecoverable amounts are recognized in the consolidated statement of profit or loss where there is objective evidence that the asset is impaired. The allowance recognized is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Available-for-sale investmentsAvailable-for-sale investments are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Available-for-sale investments are recognised initially at fair value plus directly attributable transaction costs. After initial recognition, available for sale investments are subsequently remeasured at fair value, with any resultant gain or loss directly recognised as a separate component of equity as fair value reserve under other comprehensive income until the investment is sold, collected, or the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the consolidated statement of profit or loss for the year. Interest earned on the investments is reported as interest income using the effective interest rate. Dividend earned on investments are recognised in the consolidated statement of profit or loss as “Dividend income” when the right to receive dividend has been established. All regular way purchases and sales of investment are recognised on the trade date when the Group becomes or cease to be a party to contractual provisions of the instrument.






(i) Non-derivative financial assets (continued)

Available-for-sale investments (continued)

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business at the end of the financial reporting year. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to current market value of another instrument which is substantially the same, discounted cash flow analysis or other valuation models. For investment in funds, fair value is determined by reference to net asset values provided by the fund administrators.

Due to the uncertain nature of cash flows arising from certain unquoted equity investments of the Group, the fair value of these investments cannot be reliably measured. Consequently, these investments are carried at cost, less any impairment losses.

If an available-for-sale investment is impaired, an amount comprising the difference between its cost and its current fair value, less any impairment loss previously recognised in the consolidated statement of profit or loss, is transferred from equity to the consolidated statement of profit or loss. Impairment losses on equity instruments recognised in the consolidated statement of profit or loss are not subsequently reversed. Reversals of impairment losses on debt instruments are reversed throughtheconsolidatedstatementofprofitorloss;iftheincreaseinfairvalueoftheinstrumentcanbeobjectivelyrelated to an event occurring after the impairment loss was recognised in the consolidated statement of profit or loss.

When the investment is disposed off, the cumulative gain or loss previously recorded in equity is recognised in the consolidated statement of profit or loss.

Derecognition of financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

• thecontractualrightstoreceivecashflowsfromtheassethaveexpired;• theGroupretainstherighttoreceivecashflowsfromtheasset,buthasassumedanobligationtopaytheminfullwithoutmaterialdelaytoathirdpartyundera‘pass-through’arrangement;or

• theGrouphastransferreditsrightstoreceivecashflowsfromtheassetandeither(a)hastransferredsubstantiallyall the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment and uncollectibility of financial assetsAn assessment is made at each end of the reporting period to determine whether there is objective evidence that a specific financial asset may be impaired. If any such evidence exists, impairment loss is recognised in the consolidated statement of profit or loss. Impairment is determined as follows:

(a) For assets carried at fair value, impairment is the difference between cost and fair value, less any impairment loss previouslyrecognisedintheconsolidatedstatementofprofitorloss;

(b) For assets carried at cost, impairment is the difference between carrying value and the present value of future cash flowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset;

(c) For assets carried at amortised cost, impairment is the difference between carrying amount and the present value of future cash flows discounted at the original effective interest rate.

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(ii) Non-derivative financial liabilitiesThe Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

Non derivative financial liabilities include loans and borrowings and trade payables and accruals.

Loans and borrowingsLoans and borrowings are recognised initially at fair value of the consideration received, less directly attributable transaction costs. Subsequent to initial recognition, loans and borrowings are measured at amortised cost using the effective interest method. Instalments due within one year at amortised cost are shown as a current liability.

Gains or losses are recognised in the consolidated statement of profit or loss when the liabilities are derecognised as well as through the amortisation process. Interest costs are recognised as an expense when incurred except those qualify for capitalisation.

Trade and other payablesLiabilities are recognised for amounts to be paid in the future for services received or when the risks and rewards associated with goods are transferred to the Group, whether billed by the supplier or not.

Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the consolidated statement or profit or loss.

(iii) Share capitalOrdinary sharesOrdinary shares are classified as equity. The bonus shares and rights issued during the year are shown as an addition to the share capital. Issue of bonus shares are deducted from the accumulated retained earnings of the Group. Any share premium on rights issue are accounted in compliance with local statutory requirements.

Dividend on ordinary share capitalDividend distributions to the Group’s shareholders are recognized as a liability in the consolidated financial statements in the period in which the dividend are approved by the shareholders. Dividend for the year that are approved after the statement of financial position date are dealt with as an event after balance sheet date.

(iv) Derivative financial instruments and hedge accounting Derivativefinancialinstrumentsarerecognisedinitiallyatfairvalue;attributabletransactioncostsarerecognisedinprofitor loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in described below for those derivative instruments designated for hedging cash flows, while changes in the fair value of derivative instruments not designated for cash flow hedges are charged directly to profit or loss.

For the purpose of hedge accounting, hedges are classified as:

• fairvaluehedgeswhenhedgingtheexposuretochangesinthefairvalueofarecognisedassetorliability orunrecognisedfirmcommitment(exceptforforeigncurrencyrisk);or

• cashflowhedgeswhenhedgingexposuretovariabilityincashflowsthatiseitherattributabletoaparticularriskassociated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment.






(iv) Derivative financial instruments and hedge accounting (continued)

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting change in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods of which they were designated.

Hedges which meet the criteria for hedge accounting are accounted for as follows:

Fair value hedgesThe change in the fair value of a hedging derivative is recognised in the consolidated statement of profit or loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as a part of the carrying value of the hedged item and is also recognised in consolidated statement of profit or loss.

Cash flow hedges The effective portion of the gain or loss on the hedging instrument is recognised as other comprehensive income and is taken directly to equity, while any ineffective portion is recognised immediately in the consolidated statement of profit or loss.

The Group uses interest rate swap contracts to hedge its risk associated primarily with interest rate fluctuations relating to the interest charged on its loans and borrowings. These are included in the consolidated statement of financial position at fair value and any resultant gain or loss on interest rate swaps contracts that qualify for hedge accounting is recognised as other comprehensive income and subsequently recognised in the consolidated statement of profit or loss when the hedged transaction affects profit or loss.

The Group uses cross currency swap contracts and forward currency contracts to hedge its risks associated with foreign exchange rate fluctuations. Further, the Group also have an interest rate swap which is not designated as a hedge. These cross currency swaps, forward currency contracts and the interest rate swaps which is not designated as hedge are included in the consolidated statement of financial position at fair value and any subsequent resultant gain or loss in the fair value is recognised in the consolidated statement of profit or loss.

The fair value of cross currency swaps and forward currency contracts is calculated by reference to respective instrument current exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is calculated by reference to the market valuation of the swap contracts.

Embedded derivative is presented with the host contract on the consolidated statement of financial position which represents an appropriate presentation of overall future cash flows for the instrument taken as a whole.

(v) Current versus non-current classificationDerivative instruments that are not designated as effective hedging instruments are classified as current or non-current or separated into a current and non-current portion based on an assessment of the facts and circumstances (i.e., the underlying contracted cash flows).

• wheretheGroupwillholdaderivativeasaneconomichedge(anddoesnotapplyhedgeaccounting)foraperiodbeyond 12 months after the reporting date, the derivative is classified as non-current (or separated into current and non-current portions) consistent with the classification of the underlying item.

• embeddedderivatesthatarenotcloselyrelatedtothehostcontractareclassifiedconsistentwiththecashflows of the host contract.

• derivativeinstrumentsthataredesignatedas,andareeffectivehedginginstruments,areclassifiedconsistentwiththe classification of the underlying hedged item. The derivative instrument is separated into a current portion and non-current portion only if a reliable allocation can be made.

100




(vi) Fair value of financial instrumentsThe fair value of financial instruments that are traded in active markets at each reporting date is determined with reference to quoted market prices or dealer price quotations, without any deduction for transaction costs. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques mayincludeusingrecentarm’slengthmarkettransactions;referencetothecurrentfairvalueofanotherinstrumentthatissubstantiallythesame;discountedcashflowanalysisorothervaluationmodels.Ananalysisoffairvaluesoffinancialinstruments and further details as to how they are measured are provided in note 35.

Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Earnings per shareThe Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees, if any.

Inventories Inventories are stated at the lower of cost and net realisable value.

The cost of inventories is based on the weighted average principle, and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition

Net realisable value is based on estimated selling price less any further costs expected to be incurred on completion and disposal.

ProvisionsProvisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured as a best estimate of the expenditure required to settle the obligation at the statement of financial position date, and are discounted to present value where the effect is material.

Employee benefitsEnd of service benefitsThe Group provides end of service benefits to its employees. The entitlement to these benefits is based upon the employees’ final salary and length of service, subject to the completion of a minimum service period, calculated under the provisions of the Labour Law and is payable upon resignation or termination of the employee. The expected costs of these benefits are accrued over the period of employment.

Pensions and other post employment benefitsPension costs under the Group’s defined benefit pension plans are determined by periodic actuarial calculation using the projected-unit-credit method and applying the assumptions on discount rate, expected return on plan assets and annual rate of increase in compensation. Actuarial gains or losses are recognised as income or expense when the net cumulative unrecognised actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10% of the present value of the defined benefit obligation or fair value of plan assets, whichever is greater, at that date. These gains or losses in excess of the 10% corridor are recognised on a straight-line basis over the expected average remaining working lives of the employees. Past service cost is recognised over the estimated average remaining service periods of the employees.





Employee benefits (continued)

Pensions and other post employment benefits (continued)

The defined benefit asset or liability comprises the present value of the defined benefit obligation less past service cost not yet recognised and less the fair value of plan assets out of which the obligations are to be settled directly. The value of any asset is restricted to the sum of any past service cost not yet recognised and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.

With respect to the Qatari nationals, the Company makes contributions to Qatar Retirement and Pension Authority as a percentage of the employees’ salaries in accordance with the requirements of respective local laws pertaining to retirement and pensions. The Company’s share of contributions to these schemes, which are defined contribution schemes under International Accounting Standard (IAS) – 19 Employee Benefits are charged to the consolidated statement of profit or loss.

Cash settled share-based payment transactionsThe Group provides long term incentives in the form of shadow shares (“the benefit”) to its employees. The entitlement to these benefits is based on individual performance and overall performance of the Group, subject to fulfilling certain conditions (“vesting conditions”) under documented plan and is payable upon end of the vesting period (“the exercise date”). The benefit is linked to the share price of the Group, and the Group proportionately recognise the liability against these benefits over the vesting period through the consolidated statement of profit or loss, until the employees become unconditionally entitled to the benefit.

The fair value of the liability is reassessed on each reporting date and any changes in the fair value of the benefit are recognized through the consolidated statement of profit or loss.

Once the benefit is settled in cash at the exercise date, the liability is derecognised. The amount of cash settlement is determined based on the share price of the Group at the exercise date. On breach of the vesting conditions, the liability is derecognised through the consolidated statement of profit or loss.

Foreign currencyForeign currency transactionsEach entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the end of the financial reporting year.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity investments which are recognised in other comprehensive income.

Translation of foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Qatari riyals at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Qatari Riyals at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control or significant influence is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to consolidated statement of profit or loss as part of the gain or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to consolidated statement of profit or loss.

102



Foreign currency (continued)

Translation of foreign operations (continued)

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and presented in the translation reserve in equity.

Non-financial assetsThe carrying amounts of the Group’s non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the consolidated statement of profit or loss.

Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Segment reportingSegment results that are reported to the Group’s CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Events after the reporting dateThe consolidated financial statements are adjusted to reflect events that occurred between the reporting date and the date when the consolidated financial statements are authorised for issue, provided they give evidence of conditions that existed at the reporting date.

4 BUSINESSCOMBINATIONSANDCHANGESINNON-CONTROLLINGINTERESTS4.1 ACQUISITIONOFNON-CONTROLLINGINTERESTSIN2013Acquisition of non-controlling interest of Asiacell Communication PJSC (“Asiacell”)In February 2013, on conclusion of an Initial Public Offer (IPO) made by one of the Group subsidiaries Asiacell, the Group acquired an additional stake of 10.16%. With this, the Group’s effective interest in Asiacell has increased from 53.90% to 64.06%.

As a result of this change in ownership interest, the Group recognised a decrease in non-controlling interest amounting to QR 592,669 thousands and a decrease in retained earnings amounting to QR 1,590,459 thousands.

The consideration paid and effects of change in ownership interest were as follows:

QR’000

Consideration paid for additional 10.16% interest 2,183,128Less: share of net assets acquired (592,669)

Consideration paid in excess of additional interest in carrying value of net assets 1,590,459



4 BUSINESSCOMBINATIONSANDCHANGESINNON-CONTROLLINGINTERESTS(CONTINUED)

4.2ACQUISITIONOFNON-CONTROLLINGINTERESTSIN2012The following acquisition of non-controlling interests in 2012, resulted in change in retained earnings, non-controlling interests and total equity as depicted below:

Retained earningsQR’000

Non-controlling interestsQR’000

Total EquityQR’000

Change in non controlling interests inPublic Telecommunication Company Limited (118,755) 118,755 –Asiacell Communication PJSC (2,634,604) (1,077,706) (3,712,310)Starlink W.L.L. (4,981) (1,209) (6,190)National Mobile Telecommunications Co. K.S.C. 1,612,054 (8,372,773) (6,760,719)Tunisiana S.A (884,937) (426,004) (1,310,941)Wataniya Palestine Mobile Telecommunication

Limited P.S.C. (“WPT”) (9,685) (4,839) (14,524)Midya Telecom Company Limited (4,078) 4,078 –Asia Mobile Holdings Pte. Ltd. (AMH) (1,489) – (1,489)

Refertoconsolidatedstatementofchangesinequity (2,046,475) (9,759,698) (11,806,173)

5 REVENUE

2013 QR’000

2012 QR’000

Revenue from rendering of services 32,941,756 32,848,578 Sale of telecommunications equipment 675,203 421,185 Revenue from use of assets by others 234,381 205,846

33,851,340 33,475,609

6 OPERATINGEXPENSES

2013 QR’000

2012 QR’000

Outpayments and interconnect charges 3,660,046 3,601,601Regulatory and related fees 2,429,761 2,218,282Rentals and utilities – network 1,274,566 1,155,035 Network operation and maintenance 1,805,328 1,767,158 Cost of equipment sold and other services 1,907,117 1,614,630 Provision for obsolete and slow moving inventories 7,571 6,345

11,084,389 10,363,051

104

7 SELLING,GENERALANDADMINISTRATIVEEXPENSES

2013QR’000

2012QR’000(Restated)

Employee salaries and associated costs 3,575,764 3,143,518 Marketing costs and sponsorship 1,288,219 1,176,040 Legal and professional fees 432,771 341,376 Commission on cards 1,216,627 1,177,315 Allowance for impairment of trade receivables 209,589 189,707 Rental and utilities 458,626 436,418 Repairs and maintenance 91,744 98,623 Other expenses 951,743 1,016,731

8,225,083 7,579,728

8 DEPRECIATIONANDAMORTISATION

2013 QR’000

2012 QR’000

Depreciation of property, plant and equipment and investment property 6,095,116 5,931,363 Amortisation of intangible assets 1,567,733 1,681,094

7,662,849 7,612,457

9 NET FINANCE COSTS

2013 QR’000

2012 QR’000

Finance costInterest expenses 2,092,748 2,206,914 Profit element of islamic financing obligation 69,678 54,154 Amortisation of deferred financing costs (note 26) 122,787 155,764 Other finance charges 18,577 7,338 Ineffective portion of cash flow hedges transferred – 282

2,303,790 2,424,452Finance incomeInterest income (282,908) (503,446)

Net finance costs 2,020,882 1,921,006



10 OTHER(EXPENSE)/INCOME–NET

2013 QR’000

2012 QR’000

Foreign currency losses – net (1,015,340) (369,783) Gain/(loss) on disposal of available-for-sale investments 84,065 (2,068)Gain on disposal of property, plant and equipment 64,527 468,516 Dividend income 43,851 84,141 Rental income 21,034 17,828 Change in fair value of derivatives – net 90,430 (2,332)Miscellaneous income 26,685 325,850

(684,748) 522,152

In 2012, profit on disposal of property, plant and equipment includes a gain of QR 430.0 million recognized in August 2012 related to sale and lease back transaction by one of the Group’s subsidiaries PT Indosat TBK (“Indosat”).

11 ROYALTIESANDFEES

Note2013

QR’0002012

QR’000

Royalty (i) 130,763 125,119 Industry fees (ii) 167,327 159,354 Other statutory fees (iii) 36,384 31,522

334,474 315,995

(i) Royalty is payable to the Government of the Sultanate of Oman based on 7% of the net of predefined sources of revenue and operating expenses.

(ii) The Group provides for a 12.5% industry fee on profits generated from the Group’s operations in Qatar.(iii) Contributions by National Mobile Telecommunications Company K.S.C to Kuwait Foundation for the Advancement of Sciences (“KFAS”),

National Labour Support Tax (“NLST”) and Zakat are included under other statutory fees.

12 BASICANDDILUTEDEARNINGSPERSHAREBasic earnings per share is calculated by dividing the profit for the year attributable to shareholders of the parent by the weighted average number of shares outstanding during the year.

There were no potentially dilutive shares outstanding at any time during the year and therefore, the diluted earnings per share is equal to the basic earnings per share.

2013 2012

Continuing operations

Discontinued operation Total

Continuing operations

Discontinued operation Total

Profit for the year attributable to shareholders of the parent (QR’000) 2,569,402 9,255 2,578,657 3,073,374 (126,807) 2,946,567

Weighted average number of shares (in ’000) 320,320 – 320,320 297,815 – 297,815

Basic and diluted earnings per share (QR) 8.02 – 8.05 10.32 – 9.89

106

12 BASICANDDILUTEDEARNINGSPERSHARE(CONTINUED)

The weighted average number of shares has been calculated as follows:

2013Noofshares‘000

2012No of shares ‘000

Qualifying shares at 1 January 320,320 176,000Effect of bonus share issue – 52,800Effect of right share issue – 69,015

Weighted average number of shares 320,320 297,815

13 PROPERTY,PLANTANDEQUIPMENT

Land and buildings

QR’000

Exchange and networks assets

QR’000

Subscriber apparatus and

other equipmentQR’000

Capital work in progress

QR’000Total

QR’000

CostAt 1 January 2012 6,955,588 43,969,476 4,658,733 4,153,159 59,736,956Reclassification to investment

property (note 42 (i)) (105,018) – – – (105,018)

At 1 January 2012 (Restated) 6,850,570 43,969,476 4,658,733 4,153,159 59,631,938

Acquisition of subsidiary 7,053 126,761 4,957 – 138,771Additions 1,424,707 1,070,182 81,337 4,739,490 7,315,716Transfers 452,949 3,552,310 344,362 (4,349,621) –Disposals (963,858) (653,226) (47,498) (2,071) (1,666,653)Reclassification 3,391 415,883 27,659 (429,631) 17,302Discontinued operation (1,617) (60,305) (39,147) – (101,069)Exchange adjustment (345,464) (1,751,641) (144,295) (108,009) (2,349,409)

At 31 December 2012 7,427,731 46,669,440 4,886,108 4,003,317 62,986,596

Additions 246,875 2,218,891 276,326 6,555,841 9,297,933Transfers 439,667 3,132,486 358,759 (3,930,912) – Disposals (40,979) (1,721,469) (62,627) (3,001) (1,828,076)Reclassification 1,394 572,831 13,848 (573,921) 14,152Discontinued operation (5,603) – (29,036) – (34,639)Exchange adjustment (1,202,014) (5,245,010) (399,435) (246,362) (7,092,821)

At 31 December 2013 6,867,071 45,627,169 5,043,943 5,804,962 63,343,145



13 PROPERTY,PLANTANDEQUIPMENT(CONTINUED)

Land and buildings

QR’000

Exchange and networks assets

QR’000

Subscriber apparatus and

other equipmentQR’000

Capital work in progress

QR’000Total

QR’000

Accumulated depreciation and impairment losses

At 1 January 2012 3,011,035 20,245,730 3,415,093 – 26,671,858Reclassification to investment

property (note 42 (i)) (33,194) – – – (33,194)

At 1 January 2012 (Restated) 2,977,841 20,245,730 3,415,093 – 26,638,664Acquisition of subsidiary 410 25,251 1,112 – 26,773Provided during the year 488,679 4,979,671 513,058 – 5,981,408Impairment losses – 102,144 – – 102,144Disposals (378,871) (491,591) (44,552) – (915,014)Reclassification 240 28,722 (29,413) – (451)Discontinued operation (1,571) (60,305) (38,680) – (100,556)Exchange adjustment (163,096) (902,935) (116,455) – (1,182,486)

At 31 December 2012 2,923,632 23,926,687 3,700,163 – 30,550,482

Provided during the year 533,411 5,034,342 524,925 – 6,092,678Relating to disposals (39,810) (1,280,416) (55,167) – (1,375,393)Reclassification (12) 12 – – –Related to discontinued operation (5,049) – (24,632) – (29,681)Exchange adjustment (544,110) (3,320,195) (346,468) – (4,210,773)

At 31 December 2013 2,868,062 24,360,430 3,798,821 – 31,027,313

Carrying valueAt 31 December 2013 3,999,009 21,266,739 1,245,122 5,804,962 32,315,832

At 31 December 2012 (Restated) 4,504,099 22,742,753 1,185,945 4,003,317 32,436,114

i) Exchange and network assets include finance lease assets recognized on account of sale and lease back transaction of one of the Group subsidiaries’ Indosat.

ii) As at 1 January 2012, one of its subsidiaries, PT Indosat TBK, reassessed the useful life of its tower and fencing assets from 15 years to 25 years and 10 years, respectively, its buildings from 20 years to 40 years, and its fixed wireless access technical equipment from 10 years to 7 years. In addition, following proposals to upgrade its network in order to fully utilise its 900 MHz frequency channel for 3G services, as at 1 September 2012, Indosat reassessed the useful life of its cellular technical equipment from 10 years to 8 years. This change was treated as change in estimate and resultant increase in depreciation expense by QR 516,266 thousands was prospectively accounted in last year’s consolidated financial statements.

108

14 INTANGIBLEASSETSANDGOODWILL

GoodwillQR’000

License costsQR’000

Customer contracts

and related customer

relationshipQR’000

Brand/Trade names

QR’000

Concessions intangible

assetsQR’000

IRU, software

and other intangibles

QR’000Total

QR’000

CostAt 1 January 2012 13,118,115 24,825,158 970,340 3,672,340 794,415 1,894,820 45,275,188Acquisition of subsidiary 114,635 25,882 – – – 407 140,924Additions – 485,854 – – 1,775 453,766 941,395Disposals – – – – (1,052) (1,335) (2,387)Reclassification – – – – – (17,302) (17,302)Discontinued operation – (37,450) – – – (12,433) (49,883)Exchange adjustment (503,550) (440,845) (54,114) (173,085) (2,546) (37,622) (1,211,762)

At 31 December 2012 12,729,200 24,858,599 916,226 3,499,255 792,592 2,280,301 45,076,173Additions – 242,225 – – 4,932 246,574 493,731Disposals – – – – (1,019) – (1,019)Reclassification – – – – – (14,152) (14,152)Discontinued operation – – – – (796,505) (49,465) (845,970)Exchange adjustment (1,235,697) (606,311) (160,219) (503,758) – (56,384) (2,562,369)

At 31 December 2013 11,493,503 24,494,513 756,007 2,995,497 – 2,406,874 42,146,394

Accumulated amortisation and impairment losses

At 1 January 2012 394,633 4,985,193 815,862 948,980 320,587 1,068,856 8,534,111Acquisition of subsidiary – 7,042 – – – 18 7,060Amortisation during the year – 1,130,685 70,626 293,278 81,193 221,680 1,797,462Impairment losses 25,536 23,383 – – 234,057 – 282,976Disposals – – – – (565) (1,429) (1,994)Reclassification – – – – – 451 451Discontinued operation – (37,450) – – – (12,433) (49,883)Exchange adjustment (23,590) (105,038) (48,797) (33,239) (1,013) (28,504) (240,181)

At 31 December 2012 396,579 6,003,815 837,691 1,209,019 634,259 1,248,639 10,330,002Amortisation during the year – 1,098,598 55,133 167,581 80,141 250,559 1,652,012Impairment losses 1,707 – – – – – 1,707Disposals – – – – (670) (39) (709)Discontinued operation – – – – (713,068) (29,620) (742,688)Exchange adjustment (73,001) (176,401) (157,234) (109,056) (662) (51,345) (567,699)

At 31 December 2013 325,285 6,926,012 735,590 1,267,544 – 1,418,194 10,672,625

Carrying valueAt 31 December 2013 11,168,218 17,568,501 20,417 1,727,953 – 988,680 31,473,769

At 31 December 2012 12,332,621 18,854,784 78,535 2,290,236 158,333 1,031,662 34,746,171



14 INTANGIBLEASSETSANDGOODWILL(CONTINUED)

i. Impairment testing of goodwill Goodwill acquired through business combinations has been allocated to individual cash generating units (CGUs) for impairment testing as follows:

Cash generating units

2013Carrying value

QR’000

2012Carrying value

QR’000

Wataniya, Kuwait 606,122 608,241Wataniya, Algeria 2,282,330 2,290,297Tunisiana S.A., Tunisia 4,169,216 4,393,212Indosat, Indonesia 3,597,895 4,528,065Asiacell, Iraq 353,408 353,408Others 159,247 159,398

11,168,218 12,332,621

Goodwill was tested for impairment as at 31 December 2013. The recoverable amount of the CGUs was determined based on value in use calculated using cash flows projections by the management covering a period of ten years.

Key Assumptions used in value in use calculationsKey AssumptionsThe principal assumptions used in the projections relate to the number of subscribers, in roaming revenue, average revenues per user, operating costs, taxes and EBITDA. The assumptions are constructed based upon historic experience and management’s best estimate of future trends and performance and take into account anticipated efficiency improvements over the forecasted period.

Discount ratesDiscount rates reflect management’s estimate of the risks specific to each unit. Discount rates are based on a weighted average cost of capital for each CGU. In determining the appropriate discount rates for each unit, the yield on a ten-year US Treasury bond and specific risk factors for each country has been taken into consideration.

Growth rate estimatesFor the periods beyond that covered by the projections, long-term growth rates are based on management’s best estimates of the growth rates relevant to telecommunications industry in the particular country.

Cash generating units

(Expressed in percentage)

Discount rate Terminal value growth rate

2013 2012 2013 2012

Wataniya, Kuwait 9.4% 9.5% 2.75% 2.75%Wataniya, Algeria 10.5% 10.6% 2.75% 2.75%Tunisiana S.A., Tunisia 11.0% 10.6% 2.75% 2.75%Indosat, Indonesia 11.8% 12.0% 2.75% 2.75%Asiacell, Iraq 16.2% 15.8% 2.75% 2.75%

110

14 INTANGIBLEASSETSANDGOODWILL(CONTINUED)

i. Impairment testing of goodwill (continued)

Management considers that changes to the discount rate could cause the carrying value of the following CGUs to exceed their recoverable amount. If the discount rate is increased by the percentages as mentioned below, the recoverable amount equals the carrying value:

2013 2012

Wataniya, Kuwait 1.5% 11.4%Wataniya, Algeria 7.3% 14.6%Tunisiana S.A., Tunisia 1.4% 2.1%Indosat, Indonesia 2.2% 1.9%Asiacell, Iraq 44.2% 18.9%

ii. Impairment of financial assets2013

QR’0002012

QR’000

Impairment of available-for-sale investments (note 17) 3,228 42,345Impairment of assets 38,410 385,120

41,638 427,465

15 INVESTMENTPROPERTY

2013QR’000


CostAt 1 January 105,018 105,018

At 31 December 105,018 105,018

Accumulated depreciationAt 1 January 38,559 33,194Provided during the year 6,096 5,365

At 31 December 2013 44,655 38,559

Carrying valueAt 31 December 60,363 66,459

Investment property comprises of the portion of the Group’s head quarter building rented to an external party. As per valuation performed by external valuers, the fair value of Investment property is QR 63,000 thousands (2012:QR 63,000 thousands) which approximates the carrying amount as at 31 December 2013.



16 INVESTMENTINASSOCIATESThe Group has the following investment in associates

Associate companies Principal activityCountry of incorporation

Effective ownership

2013 2012

Navlink, Inc., Managed Service Provider delivering technology solutions in the enterprise data market

United State of America

38% 38%

Asia Mobile Holdings Pte Ltd (“AMH”) Holding company Singapore 25% 25%

PT Multi Media Asia Indonesia Satellite based telecommunication services

Indonesia 17% 17%

Liberty Telecoms Holdings Inc. (“LTHI”) Telecommunication services Philippines 40% 40%

MEEZA QSTP LLC Information technology services Qatar 20% 20%

PT Citra Bakti, Indonesia Product certification and testing Indonesia 9% 9%

The following table is the summarised financial information of the Group’s investments in the associates.

2013QR’000

2012QR’000

Group’s share of associates’ statement of financial position:Current assets 868,974 920,834Non-current assets 2,386,069 2,495,777Current liabilities (925,498) (905,549)Non-current liabilities (1,868,586) (1,970,060)

Net assets 460,959 541,002Goodwill 1,291,213 1,332,382

Carrying amount of the investment 1,752,172 1,873,384

Group’s share of associates’ revenues and results: Revenues 1,813,684 1,861,675

Results – net of tax 97,869 34,621

During the year management has performed impairment test and based on the currently available information, there is no evidence of impairment in the value of investment in associates.

17 AVAILABLE-FOR-SALEINVESTMENTS

2013QR’000

2012QR’000

Quoted equity investments 988,248 1,057,084Unquoted equity investments 666,847 637,494Unquoted debt securities 113,505 126,717Investments in funds 935,893 812,355

2,704,493 2,633,650

112

17 AVAILABLE-FOR-SALEINVESTMENTS(CONTINUED)

At 31 December 2013, certain unquoted equity investments amounting to QR 62,727 thousands (2012: QR 146,426 thousands) are carried at cost less impairment due to non-availability of quoted market prices or other reliable measures of their fair value.

During the year, the Group has recorded an impairment loss of QR 3,228 thousands (2012: QR 42,345 thousands) on certain available-for-sale investments. In the opinion of the management, based on the currently available information, there is no evidence of further impairment in the value of available-for-sale investments.

18 OTHERNON-CURRENTASSETS

2013QR’000


Prepaid rentals 242,473 284,405Other long term receivables 355,213 415,218Long term loans – 149,956Others 99,558 58,581

697,244 908,160

19 INCOMETAXIncome tax represents amounts recognised by subsidiary companies. The major components of income tax expense for the years 2013 and 2012 are:

2013QR’000


Current income taxCurrent income tax charge 760,368 849,904Adjustments in respect of previous years’ income tax 154,682 42,752Deferred income taxRelating to origination and reversal of temporary differences (303,161) 84,498

Income tax included in the consolidated statement of profit or loss 611,889 977,154

The Parent company is not subject to income tax in the State of Qatar. The tax rate applicable to the taxable subsidiaries which is in the range of 10% to 35% (2012: 10% to 35%). For the purpose of determining the taxable results for the year, the accounting profit of the companies were adjusted for tax purposes. Adjustments for tax purposes include items relating to both income and expense.

The adjustments are based on the current understanding of the existing laws, regulations and practices of each subsidiaries jurisdiction. In view of the operations of the Group being subject to various tax jurisdictions and regulations, it is not practical to provide a detailed reconciliation between accounting and taxable profits together with the details of the effective tax rates. As a result, the reconciliation includes only the identifiable major reconciling items.



19 INCOMETAX(CONTINUED)

The tax reconciliation is presented as follows:

2013QR’000


Profit before tax 3,895,146 5,812,680Profit of parent and subsidiaries not subject to corporate income tax (1,132,819) (1,557,679)

Profit of parent and subsidiaries subject to corporate income tax 2,762,327 4,255,001Add:Allowances, accruals and other temporary differences 708,050 (77,752)Expenses and income that are not subject to corporate tax (161,324) 162,320

Less:Depreciation – net of accounting and tax 571,561 517,243Unutilised tax losses brought forward – (601,855)

Taxable profit of subsidiaries and associates that are subject to corporate income tax 3,880,614 4,254,957

Income tax charge at the effective income tax rate of 20% (2012: 20%) 760,368 849,904

Consolidated statement of financial position Consolidated statement of profit or loss

2013QR’000


2013QR’000


Accelerated depreciation for tax purposes (410,222) (778,052) 237,160 131,117Losses available to offset against future

taxable income 60,325 85,798 (34,470) (227,325)Allowances, accruals and other

temporary differences 49,384 98,757 65,260 (31,023)Deferred tax origination on purchase

price allocation (528,000) (702,058) 35,211 42,733

Deferred tax liability/Deferred tax expense (income) – net (828,513) (1,295,555) 303,161 (84,498)

Reflected in the consolidated statement of financial position as follows:

2013QR’000


Deferred tax asset 50,703 74,581Deferred tax liability (879,216) (1,370,136)

(828,513) (1,295,555)

Movement of deferred tax liability – net

2013QR’000


At 1 January 1,295,555 1,327,664Tax (income)/expense during the year (303,161) 84,498Tax on other comprehensive income 68,388 6,428Exchange adjustment (232,269) (123,035)

At 31 December 828,513 1,295,555

114

19 INCOMETAX(CONTINUED)

Unrecognised deferred tax assets At 31 December 2013, deferred tax assets of QR 110,837 thousands (2012: QR 111,920 thousands) for temporary differences of QR 353,859 thousands (2012: QR 346,147 thousands) related to investments in subsidiaries were not recognised because the subsidiaries were unable to assess with reasonable certainty that sufficient taxable profit would be available to recover the asset in the foreseeable future.

During 2012, management of one of the subsidiaries of the Group, Wi-Tribe Pakistan Limited (“wi-tribe Pakistan”) had reassessed the recoverability of the wi-tribe Pakistan’s deferred tax asset along with the envisaged time frame in which the deductible timing difference were expected to be adjusted against future taxable profits.

On the basis of its reassessment, management of the Wi-tribe Pakistan believes that expected time lines for the adjustment of deductible taxable differences were delayed than envisaged earlier. Taking cognizance of this increased uncertainty, deferred tax asset already recognized up to 31 December 2011 of QR 86.1 million was reversed and charged to the consolidated statement of profit or loss account as a tax expense.

20 INVENTORIES

2013QR’000

2012QR’000

Subscribers’ equipment 215,090 190,093Other equipment 267,443 144,057Cables and transmission equipment 93,870 66,786

576,403 400,936Less: Provision for obsolete and slow moving inventories (39,092) (42,169)

537,311 358,767

Inventories consumed are recognised as expense during the year and included as a part of cost of equipment sold and other services under operating expenses, amounting to QR 1,389,107 thousands (2012: QR 1,150,220 thousands). Movement in the provision for obsolete and slow moving inventories is as follows:

2013QR’000

2012QR’000

At 1 January 42,169 45,699Provided during the year 9,733 9,279Amounts written off (3,089) (12,343)Related to discontinued operation (7,831) –Exchange adjustment (1,890) (466)

At 31 December 39,092 42,169

21 TRADEANDOTHERRECEIVABLES

2013QR’000

2012QR’000

Trade receivables – net of impairment allowances 2,728,082 2,932,428Other receivables and prepayments 3,003,276 2,590,525Unbilled subscriber revenue 715,054 317,984Amounts due from international carriers 558,029 223,386Positive fair value of derivatives contracts 138,471 30,637Net prepaid pension costs 1,149 548

7,144,061 6,095,508



21 TRADEANDOTHERRECEIVABLES(CONTINUED)

At 31 December, trade receivables amounting to QR 1,010,951 thousands (2012: QR 1,007,404 thousands) were impaired and fully provided for.

Movement in the allowance for impairment of trade receivables is as follows:

2013QR’000

2012QR’000

At 1 January 1,007,404 893,416Charge for the year 230,117 213,088Amounts written off (90,807) (78,828)Related to discontinued operation (91,636) (1,052)Exchange adjustment (44,127) (19,220)

At 31 December 1,010,951 1,007,404

At 31 December 2013, the ageing of unimpaired trade receivables is as follows:

TotalQR ‘000

Neither past due nor impaired

QR ‘000

Past due not impaired

< 30daysQR ‘000

30 – 60 DaysQR ‘000

60 – 90 DaysQR ‘000

> 90 daysQR ‘000

2013 2,728,082 942,910 446,975 333,720 213,154 791,323

2012 2,932,428 1,228,234 354,549 233,322 157,636 958,687

Unimpaired receivables are expected on the basis of past experience to be fully recoverable. It is not the practice of the Group to obtain collateral over receivables and the vast majorities are therefore, unsecured.

22 CASHANDCASHEQUIVALENTSCash and cash equivalents included in the consolidated statement of cash flows comprise the following items:

Note2013

QR’0002012

QR’000

Bank balances and cash (i) 20,304,571 15,006,026Less:Restricted deposits (300,413) (209,787)

Cash and cash equivalents of continuing operation 20,004,158 14,796,239Cash and cash equivalents of discontinued operation 41 199,661 4,843

Cash and cash equivalents as per consolidated statement of cash flows at 31 December 20,203,819 14,801,082

(i) Bank balances and cash equivalents include fixed deposits maturing after three months amounting to QR 8,321,931 thousands (2012: QR4,648,116 thousands). The management is of the opinion that these fixed deposits are readily convertible to cash and is held to meet short-term commitments.

(ii) Short term deposits are made for varying periods depending on the immediate cash requirements of the Group and the interest on the respective short term deposit rates range from 0.25% to 11.00% (2012: 0.50% to 9.50%).

116

23 SHARECAPITAL

2013 2012

No of shares (000) QR’000 No of shares (000) QR’000

AuthorisedOrdinary shares of QR 10 eachAt 1 January 500,000 5,000,000 200,000 2,000,000Increase in authorised share capital – – 300,000 3,000,000

At 31 December 500,000 5,000,000 500,000 5,000,000

Issued and fully paid upOrdinary shares of QR 10 eachAt 1 January 320,320 3,203,200 176,000 1,760,000Bonus shares issued – – 52,800 528,000Right shares issued – – 91,520 915,200

At 31 December 320,320 3,203,200 320,320 3,203,200

Authorised share capitalThe shareholders resolved at the Annual General Meeting held on 25 March 2012 to increase the authorised share capital by QR 3,000,000 thousands by the creation of 300,000,000 ordinary shares of QR 10 each.

Bonus sharesDuring 2012, the Group issued bonus shares of 30% of the share capital as at 31 December 2011 amounting to QR 528,000 thousands.

Right sharesIn 2012, Company called for a rights issue of 91,520 thousand shares in the ratio of two shares for every five shares held. The shares were offered at a premium of QR 65 per share on 13 May 2012 and the allotment was made on 24 June 2012. The share premium arising out of the rights issue, net of rights issue expenses amounting to QR 5,940,145 thousands is included in the legal reserve as required by Article 154 of Qatar Commercial Companies Law No: 5 of 2002.

24 RESERVESa) Legal reserveIn accordance with Qatar Commercial Companies’ Law No. 5 of 2002 and the Company’s Articles of Association, 10% of the profit of the Company for the year should be transferred to the legal reserve until such reserves reach 50% of the issued share capital. During 2008, an amount of QR 5,494,137 thousands, being the net share premium amount arising out of the rights issue was transferred to legal reserve. During 2012, an amount of QR 5,940,145 thousands, being the net share premium amount arising out of the rights issue was transferred to legal reserve.

The reserve is not available for distribution except in the circumstances stipulated in the Companies’ law and the Company’s Articles of Association.

b) Fair value reserveThe fair value reserve comprises the cumulative net change in the fair value of available-for-sale investments and effective portion of qualifying cash flow hedges.

2013QR’000

2012QR’000

Fair value reserve of available for sale investments 1,316,087 1,077,551Cash flow hedge reserve 10,282 6,943

1,326,369 1,084,494



24 RESERVES(CONTINUED)

c) Employee benefit reserveEmployment benefit reserve is created on account of adoption of revised IAS – 19 “Employee benefits”. Employee benefit reserve comprises actuarial gains/(losses) pertaining to defined benefit plans.

d) Translation reserveThe translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net investment in a foreign operation.

e) Other statutory reservesIn accordance with the statutory regulations of the various subsidiaries, a share of their respective annual profits should be transferred to a non-distributable statutory reserve.

25 COMPONENTSOFOTHERCOMPREHENSIVEINCOME

2013QR’000

2012QR’000

Available-for-sale investments:Gain arising during the year 312,041 165,890Reclassification adjustments included in the consolidated statement of profit or loss (84,065) 2,068Transfer to consolidated statement of profit or loss on impairment 3,228 3,745Deferred tax effect – (36,690)

231,204 135,013

Cash flow hedges:Gain arising during the year 1,026 326,620Deferred tax effect (123) (374)Ineffective portion of cash flow hedges transferred to consolidated

statement of profit or loss – 282

903 326,528

Employee benefit reserve:Net movement in employee benefit reserve 304,827 (123,493)Deferred tax effect (67,716) 30,877

237,111 (92,616)

Associates:Share of changes in fair value of cash flow hedges 2,843 1,443

Translation reserves:Foreign currency translation differences – foreign operations (3,096,664) (1,343,653)Deferred tax effect (549) (241)

(3,097,213) (1,343,894)

Other comprehensive income for the year – net of tax (2,625,152) (973,526)

118

26 LOANSANDBORROWINGSThe loans and borrowings presented in the consolidated statement of financial position consist of the following:

2013QR’000

2012QR’000

Parent company’s loans 8,193,375 9,233,248Subsidiaries’ loansQtel International Finance Limited 22,759,384 19,117,883Ooredoo Tamweel Limited 4,551,877 –Omani Qatari Telecommunications Company S.A.O.G. 369,868 269,616National Mobile Telecommunications Company K.S.C. and its subsidiaries 1,919,073 1,443,823Asiacell Communications P.J.S.C. 719,422 1,137,726PT Indosat Tbk and its subsidiaries 7,214,733 8,368,881Others 41,513 194,053

45,769,245 39,765,230Less: Deferred financing costs (456,920) (438,675)

45,312,325 39,326,555

Presented in the consolidated statement of financial position as:

2013 2012

Principalrepayment

amountQR’000

Deferredfinancing costs

QR’000Net

QR’000

Principalrepayment

amountQR’000

Deferredfinancing costs

QR’000Net

QR’000

Current portion 8,126,487 (68,614) 8,057,873 7,373,112 (65,198) 7,307,914Non-current portion 37,642,758 (388,306) 37,254,452 32,392,118 (373,477) 32,018,641

45,769,245 (456,920) 45,312,325 39,765,230 (438,675) 39,326,555

The deferred financing costs consist of arrangement and commitment fees. Movement in deferred financing costs was as follows:

2013QR’000

2012QR’000

At 1 January 438,675 463,364Additions during the year 156,063 138,141Amortised during the year (note 9) (122,787) (155,764)Exchange adjustment (15,031) (7,066)

At 31 December 456,920 438,675



26 LOANSANDBORROWINGS(CONTINUED)

TheCompany’sloans(Parent)

Sl. No.

Facility outstanding amount as at

Maturity CollateralInterest rate/profit element Purpose of the facility Facility details

2013QR’000

2012QR’000

1 2,731,125 2,731,125 May 2015

Unsecured

LIBOR plus 1.45%

For general corporate purposes

USD 750 million Revolving Credit Facility (RCF) – tranche of the USD 2 billion entered in 2010.

2 – 4,551,875 May 2013 LIBOR plus 1.15%


USD 1250 million RCF – tranche of the USD 2 billion entered in 2010.

3 3,641,500 – March 2017 LIBOR plus 0.85%


Syndicated RCF entered into in April 2013.

4 1,820,750 1,820,750 May 2014 LIBOR plus 0.95% profit rate


Islamic financing facility based on the principle of commodity Murabaha.

5 – 129,498 March 2013 Central bank of Kuwait discount rate plus margin

For increase in stake in NMTC

Short term loan was fully repaid in March 2013.

Total 8,193,375 9,233,248

QtelInternationalFinanceLimited

Sl. No.


Maturity CollateralInterest rate/ profit element Purpose of the facility Facility details

2013QR’000

2012QR’000

1 3,277,351 3,277,351 June 2014

Unconditionally and irrevocably guaranteed by Ooredoo (Parent)

6.50%


USD 5.0 billion Global Medium Term Note Programme (“Notes”) listed on London Stock Exchange.

First tranche covering Loans 1 and 2 amounting to USD 1500 million issued on June 2009.

2 2,184,901 2,184,901 June 2019 7.88%

3 3,641,501 3,641,501 October 2016 3.38% The second tranche covering Loans 3, 4 and 5 amounting to USD 2.75 billion was issued on October 2010.

4 3,641,501 3,641,501 February 2021 4.75%

5 2,731,127 2,731,127 October 2025 5.00%

6 3,641,501 3,641,502 February 2023 3.25% New USD 3.0 billion Global Medium Term Note Programme (“Notes”) listed on Irish Stock Exchange. First tranche under this programme Loan 6 amounting to USD 1.0 billion was issued in Dec 2012.

7 1,820,751 – January 2028 3.88% A further dual tranche issuance was made in Jan 2013 covering Loan 7 and 8 of USD 500 million each.

8 1,820,751 – January 2043 4.50%

Total 22,759,384 19,117,883

120


OoredooTamweelLimited

Sl. No.



2013QR’000

2012QR’000

1 4,551,877 – December 2018 Unsecured 3.04% (profit element)


New Sukuk Trust Programme of USD 2.0 billion listed on the Irish Stock Exchange. In December 2013, a 5 year note of USD 1.25 billion was issued.

OmaniQatariTelecommunicationsCompanyS.A.O.G.(Nawras)

Sl. No.



2013QR’000

2012QR’000

1 205,968 269,616 February 2017 Unsecured LIBOR plus 2% For general corporate purposes

Syndicated Loan Facility of USD 87 million signed in February 2012 for 5 years.

2 163,900 – January 2018 Unsecured 1.8% For general corporate purposes

Syndicated Loan Facility of USD 104 million was signed in January 2013 for 5 years.

Total 369,868 269,616

National Mobile Telecommunications Company K.S.C. and subsidiaries (NMTC)

Sl. No.



2013QR’000

2012QR’000

1 – 858,976 This facility was repaid in December 2013

These loans are secured by pledges on the respective subsidiaries assets.

Algerian Repo rate plus 1.3% to 3.4% per annum and LIBOR plus 1.25% to 4.15% per annum


Wataniya Algeria – This loan facility is repayable in instalments over a period from December 2005 to March 2015.

2 326,325 325,850 June 2019 Unsecured LIBOR plus 5.0% to 5.85% per annum


Wataniya Palestine: Syndicated loan facility to finance the build out and the expansion of its existing network.

3 – 258,997 December 2013 Unsecured 1% per annum over the Central Bank of Kuwait discount rate


Wataniya Kuwait: Repayable in instalments or at maturity by December 2013.

4 487,539 – June 2018 Unsecured TMM Rate plus 1.1%


Tunisiana: Syndicated Loan facility of TND 220 million (approx USD 135 million) was signed in September 2013 for 5 years

5 7,647 – August 2015 Cash Collateral

LIBOR plus 3% For general corporate purposes

Wataniya Maldives: Loan Facilities of USD 3mn and USD 4mn were signed in February and September 2013 respectively.6 12,624 – February 2016 Cash

CollateralLIBOR plus 5.5% For general

corporate purposes




National Mobile Telecommunications Company K.S.C. and subsidiaries (NMTC) (continued)

Sl. No.



2013QR’000

2012QR’000

7 613,332 – December 2016 Unsecured 5% For general corporate purposes

Wataniya Algeria: – Loan facility of DZD 13.4 billion (approx USD 172 million) was signed in December 2013 for 3 years.

8 133,123 – November 2014 Unsecured Algerian repo rate +1.3%


Wataniya Algeria: – A loan facility of DZD 3 billion (approx USD 38 million) was signed in August 2010 for 4 years.

9 53,602 – March 2014 Unsecured 4.5% For general corporate purposes

Wataniya Algeria: – A loan facility of DZD 1.5 billion (approx USD 17.8 million) was signed in March 2013 for 1 year.

10 52,596 – September 2014 Unsecured 4.95% For general corporate purposes

Wataniya Algeria: – A loan facility of DZD 1.125 billion (approx USD 19 million) was signed in October 2012 for 2 years.

11 232,285 – October 2016 Unsecured CBK For general corporate purposes

Wataniya Kuwait: – A new loan of KD 33mn was signed in October 2013 for 3 years.

Total 1,919,073 1,443,823

Asiacell

Sl. No.



2013QR’000

2012QR’000

1 412,703 728,302 June 2015 Guaranteed by Ooredoo Q,S.C (Parent)

LIBOR plus 1.75% For general corporate purposes

QNB Loan – This loan entered in June 2012 is repayable in 30 equal monthly instalments.

2 254,905 364,148 November 2015 Guaranteed by Ooredoo Q,S.C (Parent)

LIBOR plus 1.40% For general corporate purposes

HSBC Facility – This loan entered in October 2012 is repayable in 30 equal monthly instalments.

3 51,814 45,276 December 2015 Unsecured LIBOR plus 2.50% For purchase of network equipment

HSBC – Hermes facility signed in August 2011, for US$ 23.3 million. The loan is repayable in 6 equal semi–annual instalments starting from 31 May 2013.

Total 719,422 1,137,726

122


PT Indosat Tbk and its subsidiaries

Sl. No.



2013QR’000

2012QR’000

1 – 573,536 June 2013 Unsecured US Dollar LIBOR plus 1.9% p.a. for onshore and 1.85% p.a. for offshore lenders

To finance capital expenditure, refinancing and general working capital requirements.

The Syndicated US dollar loan facility was signed in June 2008 and is repayable semi–annually over a period of 4 to 5 years. The facility has been fully repaid in June 2013.

2 343,973 400,677 September 2019 Assets as pari-passu security

5.69% p.a. To finance 85% of the French content under the Palapa D Satellite and 100% of the COFACE premium

12 years HSBC – COFACE term facility Payable in twenty semi–annual instalments.

3 96,723 112,668 September 2019 Unsecured USD LIBOR + 0.35% p.a.

To finance 85% of the launch service contract under the Palapa D Satellite

12 years HSBC – SINOSURE term facility Payable in twenty semi–annual instalments.

4 448,829 112,973 June 2014 Unsecured 1-month JIBOR plus 1.25% payable monthly

To finance working capital, capital expenditure and/or refinancing requirements

MANDIRI Revolving loan facility agreement entered in June 2011. Based on the facility agreement, the Company is required to comply with certain covenants such as maintaining financial ratios.

5 448,829 376,577 February 2014 Unsecured JIBOR + 1.75% p.a payable monthly


BCA Revolving time loan had an initial maximum amount of IDR 1,000 billion which was amended to increase the amount up to IDR 1,500 billion.

6 537,960 700,988 Facility A: May 2016

Facility B: February 2017

Facility C: November 2017

Unsecured Facility A: 6 Month LIBOR Plus 2.87%

Facility B: Commercial Interest Reference Rate (“CIRR”) Plus 1.66%

Facility C: CIRR Plus 1.64% – payable semi-annually.

Purchase of telecommunication equipments

AB Svensk Export credit facilities consisting of facilities A,B and C with maximum amounts of US $100 million, USD 155 million and USD 60 million respectively.

7 777,970 979,100 Series A: May 2014

Series B: May 2017

Unsecured Series A 10.2% and

Series B 10.65% – payable quarterly

For capital expenditure purposes

Fifth Indosat bonds – issued in May 2007 in 2 series:

Series A amounting to IDR 1,230 billion

Series B amounting to IDR 1,370 billion.




PT Indosat Tbk and its subsidiaries (continued)

Sl. No.



2013QR’000

2012QR’000

8 95,750 406,704 April 2015 Unsecured Series A 10.25% and

Series B 10.80% – payable quarterly


Sixth Indosat bonds – issued in April 2008 in 2 series:

Series A amounting to IDR 760 billion

Series B amounting to IDR 320 billion

The subsidiary is required to maintain certain financial ratios as required by the loan agreement.

9 388,985 489,550 Series A: December 2014

Series B: December 2016 – payable quarterly

Unsecured Series A 11.25% and

Series B 11.75%

Repayment of Satelindo’s debt and guaranteed floating rate bond.

Seventh Indosat bonds – issued in December 2009 in 2 series:

Series A amounting to IDR 700 billion

Series B amounting to IDR 600 billion. The subsidiary is required to maintain certain financial ratios as required by the loan agreement.

10 2,370,670 2,370,670 July 2020 Unconditionally and irrevocably guaranteed

7.375% Payable semi-annually

For purchase of Guarantee notes maturing in 2010 and 2012 and for refinancing part of the existing facilities

Guaranteed Notes (“GN”) 2020 was issued at 99.478% of their principal amount with interest payable.

The notes will be redeemable at the option of the issuer in whole or in part, at any time on or after 29 July 2015.

Certain financial ratios to be maintained as part of the covenants.

11 – 182,075 May 2013 Unsecured 6.45% per annum

Purchase of telecommunication equipments.

This facility has been fully repaid in May 2013. (Goldman Sachs International)

12 119,689 150,631 May 2014 Unsecured IDR 10.3 billion annual fixed Ijarah return


Sukuk Ijarah II bonds issued on May 2007.

Certain financial ratios need to be maintained as part of the covenants.

13 – 214,649 April 2013 Unsecured IDR 58.425 billion annual fixed Ijarah costs


Sukuk Ijarah III bonds has been fully repaid in April 2013.

14 59,845 75,315 Series A: December 2014

Series B: December 2016

Unsecured Annual fixed Ijarah return.

Series A bonds IDR 3.15 billion and

Series B bonds IDR 20.21 billion

For the purchase of Base Station Subsystem to expand the subsidiary‘s cellular network.

Sukuk Ijarah IV bonds issued in year 2009

Series A bonds amounting to IDR 28 billion

Series B bonds amounting to IDR 172 billion

124


PT Indosat Tbk and its subsidiaries (continued)

Sl. No.



2013QR’000

2012QR’000

15 359,063 451,892 June 2019 Unsecured Fixed rate of 8.625% p.a. payable quarterly


Eighth Indosat Bond Series A Notes (fixed rate bonds) of IDR 1,200 billion.

16 448,829 564,866 June 2022 Unsecured Fixed rate of 8.875% p.a. payable quarterly


Eighth Indosat Bond Series B Notes (fixed rate bonds) of IDR 1,500 billion.

17 89,766 112,973 June 2019 Unsecured Annual Ijarah payment of IDR25.875 billion


Sukuk Ijarah V bonds issued in 2012, IDR 300 billion.

18 44,374 55,378 November 2016 Assets as Pari-passu security

6 month LIBOR plus 1.45%

To finance 85% of the launch service contract under the Palapa D Satellite

9 years HSBC – commercial facility. Payable in fifteen semi- annual instalments.

19 89,766 – October 2016 Unsecured 3 months Jibor + 2.25%


A revolving loan facility of IDR 750 billion (Approx. USD 24mn) was signed in October 2013 for 3 years from IIF and SMI.

20 299,219 – December 2018 Unsecured 9.25% payable quarterly

For capital expenditure and debt refinancing

BCA loan facility of IDR 1,000 billion was signed in July 2013 for 5 years.

21 194,493 37,659 December 2015 Unsecured 1month Jibor + 1.25%


In Dec 2012, the company entered into a new loan of IDR 650 billion with a tenor of 3 years with BSMI.

Total 7,214,733 8,368,881

Others

Sl. No.



2013QR’000

2012QR’000

1 41,513 44,108 On demand Unsecured NIL For general corporate purposes

Share holder loan payable on demand.

2 – 149,945 November 2016 Unsecured 1% For general corporate purposes

Loan received from Associate – this has been repaid in full in 2013.

Total 41,513 194,053

Others represent facilities of Midya Telecom Company Limited and Qtel Investment Holdings S.P.C.



27 EMPLOYEEBENEFITS

2013QR’000


Employees’ end of service benefits 337,388 316,980Post-retirement health care plan 140,552 377,523Cash settled share based payments 256,344 162,414Defined benefit pension plan/Labour Law No. 13/2003 71,657 136,518Other employee benefits 11,299 16,636

Total employee benefits 817,240 1,010,071Current portion of cash settled share based payments (note 29) (120,276) (81,686)

Employee benefits – non current 696,964 928,385

Movement in the provision for employee benefits are as follows:

2013QR’000


At 1 January 1,010,071 952,205Provided during the year 299,392 110,816Paid during the year (129,884) (139,100)Other comprehensive income (230,223) 108,549Relating to discontinued operation (13,408) –Exchange adjustment (118,708) (22,399)

At 31 December 817,240 1,010,071

The details of the benefit plans operated by one of the Group’s subsidiaries are as follows:

Plan A – Post-retirement healthcare plan The subsidiary provides post-retirement healthcare benefits to its employees who leave after the employees fulfil the early retirement requirement. The immediate family of employees who have been officially registered in the records of the Company are also eligible to receive benefits.

Plan B – Defined Benefit Pension Plan – Labour Law No. 13/2003Indosat, Lintasarta and IMM also accrue benefits under Indonesian Labor Law No. 13/2003 (“Labor Law”) dated 25 March 2003. Their employees will receive the benefits under this law or the defined benefit pension plan, whichever amount is higher.

Plan C – Defined Benefit Pension PlanThe subsidiaries, Indosat, Satelindo and Lintasarta provide defined benefit pension plans to their respective employees under which pension benefits to be paid upon retirement. A state-owned life insurance company, PT Asuransi Jiwasraya (“Jiwasraya”) manages the plans. Pension contributions are determined by periodic actuarial calculations performed by Jiwasraya.

Based on the agreement, a participating employee will receive:

• Expirationbenefitequivalenttothecashvalueatthenormalretirementage,or• Deathbenefitnotduetoaccidentequivalentto100%ofinsurancemoneypluscashvaluewhentheemployee

dies not due to accident, or• Deathbenefitduetoaccidentequivalentto200%ofinsurancemoneypluscashvaluewhentheemployeedies

due to accident.

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27 EMPLOYEEBENEFITS (CONTINUED)

Actuarial assumptionsThe actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method, the following were the principal actuarial assumptions at the reporting date.

2013 2012

Plan A Plan B Plan C Plan A Plan B Plan C

Annual discount rate 9.5% 9.0 – 9.5% 9.0% 7.0% 6.0 – 6.5% 6.0%Ultimate cost trend rate 6.0% – – 6.0% – –Next year trend rate 8.0% – – 10.0% – –Period to reach ultimate

cost trend rate 1 Years – – 2 Years – –Increase in compensation 7.5 – 8.5% 3.0 – 9.0% – 7.5 – 8.5% 3.0 – 9.0%Expected annual rate

of return on plan assets – – 4.5 – 9.0% – – 4.5 – 8.0%Mortality rate – – TMI 2011 – – TMI 2011

Movement in net defined benefit (asset)/liabilityThe following table shows a reconciliation from the opening balances to the closing balances for net defined benefit liability (asset) and its components.

2013 2012(Restated)

Plan AQR’000

Plan BQR’000

Plan CQR’000

Plan AQR’000

Plan BQR’000

Plan CQR’000

At 1 January 383,232 138,446 (8,332) 276,200 116,913 (30,451)Included in profit or lossInterest cost 25,914 8,653 (778) 25,139 10,020 (2,605)Service cost 14,752 13,682 11,719 12,786 14,595 13,305Curtailment gain (7,700) (2,537) 2,974 – (182) 423Immediate recognition

of past service cost – vested benefit – 266 (1,025) – (241) –

32,966 20,064 12,890 37,925 24,192 11,123Included in other

comprehensive incomeActuarial (gain)/loss (180,425) (49,798) (74,604) 98,299 10,250 14,944

Other movementsContribution – – (3,122) – – (3,968)Benefit payment (6,663) (3,345) – (5,066) (886) –Refund – – 469 – – 535Exchange adjustment (84,728) (32,095) 34,503 (24,126) (12,023) (515)

(91,391) (35,440) 31,850 (29,192) (12,909) (3,948)

At 31 December 144,382 73,272 (38,196) 383,232 138,446 (8,332)

Current portion 3,830 1,615 (1,149) 5,709 1,928 (548)Non-current portion 140,552 71,657 (37,047) 377,523 136,518 (7,784)



27 EMPLOYEEBENEFITS (CONTINUED)

Plan assets comprises of time deposits, debt securities, long-term investment in shares of stock and property as follows:

2013 2012

Investments in:– Shares of stocks and properties 45.87% 7.10%– Mutual fund 44.20% 75.34%– Time deposits 6.37% 12.13%– Debt securities 3.56% 5.43%– Others 0.00% 0.00%

28 OTHERNON-CURRENTLIABILITIES

2013QR’000

2012QR’000

Ministry of Communication and Technology (‘MOCIT’) Indonesia 440,260 727,121Ministry of Telecommunications and Information Technology-Palestine 197,903 197,903Site restoration provision 61,958 47,474Finance lease liabilities (note 32) 1,079,601 1,195,349Deferred gain on finance leases 320,054 455,914Others 526,081 52,709

2,625,857 2,676,470

29 TRADEANDOTHERPAYABLES

2013QR’000

2012QR’000

Trade payables 2,790,481 3,034,702Accrued expenses 5,698,003 4,243,915Interest payable 456,240 374,913Profit payable on islamic financing obligation 10,757 –Amounts due to international carriers 748,586 369,798Negative fair value of derivatives 22,237 56,991Finance lease liabilities (note 32) 107,318 110,322Cash settled share based payments (note 27) 120,276 81,686Other payables 2,719,305 2,699,667

12,673,203 10,971,994

Included in other payables is an amount of QR 815,798 thousands (2012: QR 821,752 thousands) payable to regulators on account of regulatory fees.

128

30 DIVIDENDANDBONUSSHARESDividend paid and proposed

2013QR’000

2012QR’000

Declared, accrued and paid during the yearFinal dividend for 2012, QR 5 per share (2011: QR 3 per share) 1,601,600 528,000

Proposed for approval at Annual General Meeting (not recognised as a liability as at 31 December)Final dividend for 2013, QR 4 per share (2012: QR 5 per share) 1,281,280 1,601,600

The proposed final dividend will be submitted for formal approval at the Annual General Meeting.

Bonus shares:During 2012, the Group issued bonus shares of 30% of the share capital as at 31 December 2011 amounting to QR 528,000 thousands.

31 DERIVATIVEFINANCIALINSTRUMENTSDerivatives not designated as hedging instrumentsThe Group uses cross currency swap contracts, currency forward contracts and interest rate swaps to manage some of the currency transaction exposure and interest rate exposure. These contracts are not designated as cash flow, fair value or net investment hedges and are accounted for as derivative financial instruments:

Notional amounts

2013QR’000

2012QR’000

Cross currency swaps – 243,981Currency forward contracts 888,526 1,175,432Interest rate swaps 259,410 1,224,407Fair value hedge 304,559 304,559

1,452,495 2,948,379

Fair values

2013 2012

PositiveQR’000

NegativeQR’000

PositiveQR’000

Negative QR’000

Cross currency swaps – – 11,262 –Currency forward contracts 58,518 – 15,135 33Interest rate swaps – 11,042 – 30,594Fair value hedge 77,837 10,036 4,240 26,295

136,355 21,078 30,637 56,922

Cash flow hedgesThe Group has several interest rates swap and basis swap agreements with a view to limit its floating interest rate exposure on its term loans. Under the interest rate swap arrangements, the Group will pay an agreed fixed interest rate and receive floating interest rates based on USD LIBOR.

The swap arrangements qualify for hedge accounting under IAS 39, the hedging relationship and objective, including details of the hedged items and hedging instruments are formally documented as the transactions are accounted as cash flow hedges.



31 DERIVATIVEFINANCIALINSTRUMENTS(CONTINUED)

Cash flow hedges (continued)

The table below shows the positive and negative fair values of derivative financial instruments held as cash flow hedges together with the notional amounts:

Negative fair valueQR’000

Positive fair valueQR’000

Notional AmountsQR’000

Interest rate swaps31 December 2013 1,159 2,116 244,270

31 December 2012 69 – 80,210

32 COMMITMENTSCapital expenditure commitments

2013QR’000

2012QR’000

Estimated capital expenditure contracted for at the end of the financial reporting year but not provided for: 8,393,649 4,608,619

Operating lease commitments 2013

QR’0002012

QR’000

Future minimum lease payments: Not later than one year 203,376 175,771 Later than one year and not later than five years 615,681 511,778 Later than five years 171,165 222,572

Total operating lease expenditure contracted for at 31 December 990,222 910,121

Finance lease commitments 2013

QR’0002012

QR’000

Amounts under finance leasesMinimum lease paymentsNot later than one year 235,037 252,976Later than one year and not later than five years 906,231 953,073Later than five years 632,179 835,920

1,773,447 2,041,969Less: unearned finance income (586,528) (736,298)

Present value of minimum lease payments 1,186,919 1,305,671

Present value of minimum lease payments

Note2013

QR’0002012

QR’000

Current potion 29 107,318 110,322Non-current portion 28 1,079,601 1,195,349

1,186,919 1,305,671

130

33 CONTINGENTLIABILITIES

2013QR’000

2012QR’000

Letters of guarantees 405,961 308,557

Letters of credit 139,351 113,911

Claims against the Group not acknowledged as debts 764 2,675

LitigationThe Group is from time to time a party to various legal actions arising in the ordinary course of its business. The Group does not believe that the resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on its financial condition or results of operations, except as noted below.

a) Proceedings against PT Indosat Mega Media relating to misuse of radio frequenciesIn early 2012, the Attorney General’s Office in Jakarta (the “AGO”) initiated corruption proceedings against PT Indosat Mega Media (“IM2”), a 99 per cent owned subsidiary of PT Indosat TBK, a subsidiary of the Group, for unlawful use of a radio frequency band allocation that had been granted to Indosat. These proceedings were initiated pursuant to a report from the Indonesian Telecommunication Consumer Non Governmental Organisation, which alleged that IM2 had avoided paying certain spectrum fees by unlawfully using Indosat’s 3G spectrum which Indosat had acquired through a tender process in 2006.

On 8 July 2013, the Indonesia Corruption Court imposed a fine of QR 477 million (USD 131 million) against IM2 in a related case against the former President Director of IM2. Both the former President Director of IM2 and the AGO lodged appeals to the Jakarta High Court. On 10 January 2014, the Jakarta High Court issued a decision in favour of IM2 and cancelled the fine of QR 477 million (USD 131 million) against IM2 for the compensation of the state loss. The AGO is currently investigating related cases against IM2, Indosat and its former CEO, and the AGO may institute fresh proceedings to the Corruption Court.

b) Tax demand notices against AsiacellAs at the reporting date, one of the Group’s subsidiaries, Asiacell Communication PJSC (“ACL”) was subject to tax demand notice by the General Commission for Taxes, Iraq (the “GCT”) for the years 2004 to 2008 for an amount of QR 387.1 million and a further tax demand notice by the GCT for the years 2003 to 2007 for an amount of QR 84.6 million relating to employees’ income tax.

Currently the ACL management is in the process of discussing the basis of each of these claims and certain amount is paid under protest to comply with the requirements of tax laws in Iraq. ACL management is of the view that ACL has strong grounds to challenge each of these claims.

c) Proceedings against Wataniya relating to misuse of network infrastructureThe Ministry of Communications (“MOC”) in Kuwait initiated proceedings against one of the Group’s subsidiaries, National Mobile Telecommunication Company (“NMTC”) under Article 262 of the Kuwaiti Civil Code, claiming unlawful use of the Ministry’s network infrastructure since 1999. As of reporting date, the proceedings were pending before the Kuwaiti Court of Appeal.

Subsequent to the reporting date, on 18 February 2014, the Kuwaiti Court of Appeal ruled in favour of the MOC. The decision was based on the claimed right of the MOC to charge fees according to Kuwaiti Law for mobile services provided via the Company’s mobile network. The judgement was for an amount of QR 474.1 million (equivalent Kuwaiti Dinar 36.7 million).

As per the Kuwaiti Court rules, the management is in the process of challenging the judgment of the Court of Appeal before the Court of Cassation, hence, the outcome of the lawsuit is uncertain. The management believes that NMTC has strong grounds to challenge the judgment of the Court of Appeal, accordingly, no provision is recognised in these consolidated financial statements.



34 FINANCIALRISKMANAGEMENTObjectives and policiesThe Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, finance leases, and trade payables. The main purpose of these financial liabilities is to raise finance for the Group’s operations. The Group has various financial assets such as trade receivables, investments and cash and short-term deposits, which arise directly from its operations.

The Group also enters into derivative transactions, primarily interest rate swaps, cross currency swaps and forward currency contracts. The purpose is to manage the interest rate and currency risks arising from the Group’s operations and its sources of finance.

The main risks arising from the Group’s financial instruments are market risk, credit risk, liquidity risk and operational risk. The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below:

Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign currency exchange rates and equity prices will affect the Group’s profit, equity or value of its holding of financial instruments. The objective of market risk management is to manage and control the market risk exposure within acceptable parameters, while optimizing return.

Interest rate riskThe Group’s financial assets and liabilities that are subject to interest rate risk comprise bank deposits, loans receivable, available-for-sale debt instruments, loans and borrowings. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s financial assets and liabilities with floating interest rates and fixed interest instruments maturing within three months from the end of the financial reporting year.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage this, the Group enters into interest rate swaps, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed upon notional amount. The swaps are designated to hedge underlying debt obligations. At 31 December 2013, after taking into the effect of interest rate swaps, approximately 75% of the Group’s borrowings are at a fixed rate of interest (2012: 66%).

The following table demonstrates the sensitivity of the consolidated statement of profit or loss and equity to reasonably possible changes in interest rates by 25 basis points, with all other variables held constant. The sensitivity of the consolidated statement of profit or loss and equity is the effect of the assumed changes in interest rates for one year, based on the floating rate financial assets and financial liabilities held at 31 December. The effect of decreases in interest rates is expected to be equal and opposite to the effect of the increases shown.

Consolidated statement of profit or loss

+25b.pQR’000

Equity+25 b. pQR’000

At 31 December 2013USD LIBOR (23,489) 611Others (4,754) –

At 31 December 2012USD LIBOR (30,349) 201Others (3,206) –

132

34 FINANCIALRISKMANAGEMENT(CONTINUED)

Foreign currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities and the Group’s net investment in foreign subsidiaries.

The Group had the following significant net exposure denominated in foreign currencies.

2013QR’000

Assets(Liabilities)

2012QR’000

Assets (Liabilities)

Indonesian Rupiah (IDR) 5,402,507 4,241,922Kuwaiti Dinar (KD) 8,342,247 7,913,787US Dollars (USD) (5,521,697) (4,069,510)Euro (27,285) (267,191)Great British Pounds (GBP) (3,095) (4,011)Tunisian Dinar (TND) 7,574,129 9,065,188Algerian Dinar (DZD) 3,622,007 3,672,291Others (17,026) 95,423

The US Dollar denominated balances are not considered to represent a significant currency risk as Qatari Riyal is pegged to US Dollar.

The following table demonstrates the sensitivity to consolidated statement of profit or loss and equity for a reasonably possible change in the following currencies against Qatari Riyal, with all other variables held constant, of the Group’s profit due to changes in the fair value of monetary assets and liabilities and the Group’s equity on account of translation of foreign subsidiaries. The effect of decreases in foreign exchange rates is expected to be equal and opposite to the effect of the increases shown:

Effect on consolidated statement of profit or loss Effect on equity

2013+10%

QR’000

2012+10%

QR’000

2013+10%

QR’000

2012+10%

QR’000

Indonesian Rupiah – – 540,251 424,192Kuwaiti Dinar – – 834,225 791,379Tunisian Dinar – – 757,413 906,519Algerian Dinar – – 362,201 367,229US Dollars (552,170) (406,951) – –Euro (2,729) (26,719) – –Great British Pounds (311) (402) – –




Equity price riskThe following table demonstrates the sensitivity of the fair value reserve to reasonably possible changes in quoted equity share prices, with all other variables held constant. The effect of decreases in equity prices is expected to be equal and opposite to the effect of the increases shown.

Changes in equity indices

Effect on equityQR’000

2013Qatar Exchange (QE) +10% 55,911Kuwait Stock Exchange (KSE) +15% 1,939 Indonesia Stock Exchange (IDX) +10% 41,621

2012Qatar Exchange (QE) +10% 51,453Kuwait Stock Exchange (KSE) +15% 4,166Indonesia Stock Exchange (IDX) +10% 51,478

The Group also has unquoted investments carried at cost where the impact of changes in equity prices will only be reflected when the investment is sold or deemed to be impaired, when the consolidated statement of profit or loss will be impacted.

Credit riskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group’s exposure to credit risk is as indicated by the carrying amount of its assets which consist principally of trade receivables, bank balances, available-for-sale debt instruments and loans receivable and positive fair value of derivatives.

The Group provides telecommunication services to various parties. It is the Group’s policy that all customers who wish to obtain on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the purchase of service limits are established for each customer, which are reviewed regularly based on the level of past transactions and settlement. The Group’s maximum exposure with regard to the trade receivables net of allowance for impairment as at 31 December is as follows:

2013QR’000

2012QR’000

Qatar 887,863 878,510Other countries 1,840,219 2,053,918

2,728,082 2,932,428

With respect to credit risk arising from the other financial assets of the Group, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments are as follows:

2013QR’000

2012QR’000

Available-for-sale debt instruments 113,505 126,717Bank balances (excluding cash) 20,228,535 14,936,469Positive fair value of derivatives 138,471 30,637Amounts due from international carriers 558,029 223,386Unbilled subscriber revenue 715,054 317,984Other non-current assets – 149,956

21,753,594 15,785,149

134


Credit risk (continued)

The Group reduces the exposure of credit risk arising from bank balances by maintaining bank accounts in reputed banks, 74% of bank balances represents balances maintained with local banks in Qatar with a rating of atleast BBB+. Credit risk arising from derivative financial instruments is at any time, limited to those with positive fair values, as recorded on the consolidated statement of financial position. With gross settled derivatives, the Group is also exposed to settlement risk.

LiquidityriskLiquidity risk is the risk that the Group will not be able to meet financial obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of Groups own reserves and bank facilities. The Group’s terms of sales require amounts to be paid within 30 days from the invoiced date. The table below summarizes the maturity profile of the Group’s financial liabilities at 31 December based on contractual undiscounted payments:

Lessthan1yearQR’000

1 to 2 yearsQR’000


> 5 yearsQR’000

TotalQR’000

At 31 December 2013Loans and borrowings 10,433,708 5,806,428 17,845,652 24,679,931 58,765,719Trade payables 2,790,481 – – – 2,790,481License costs payable 165,851 153,668 433,836 – 753,355Finance lease liabilities 235,037 235,356 670,875 632,179 1,773,447Other financial liabilities 891,099 198,026 – – 1,089,125

14,516,176 6,393,478 18,950,363 25,312,110 65,172,127

Less than 1 yearQR’000



> 5 yearsQR’000

TotalQR’000

At 31 December 2012Loans and borrowings 9,290,975 9,349,494 12,166,845 19,112,391 49,919,705Trade payables 3,034,702 – – – 3,034,702License costs payable 230,869 412,956 409,780 92,638 1,146,243Finance lease liabilities 252,976 252,976 700,097 835,920 2,041,969Other financial liabilities 508,475 128,202 – – 636,677

13,317,997 10,143,628 13,276,722 20,040,949 56,779,296

Capital managementThe Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group makes adjustments to its capital structure, in light of changes in economic and business conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, or issue new shares. No changes were made in the objectives, policies or processes during the year ended 31 December 2013 and 31 December 2012.

Capital includes share capital, legal reserve, other statutory reserves and retained earnings and is measured at QR 25,263,582 thousands at 31 December 2013 (2012: QR 25,905,232 thousands).



35 FAIRVALUESOFFINANCIALINSTRUMENTSFair valuesSet out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that are carried in the consolidated financial statements:

Carrying amounts Fair values

2013QR’000

2012QR’000

2013QR’000

2012QR’000

Financial assetsAvailable-for-sale investments 2,704,493 2,633,650 2,704,493 2,633,650Other non-current assets – 149,956 – 149,956Trade and other receivables 4,139,636 3,504,435 4,139,636 3,504,435Bank balances and cash 20,304,571 15,006,026 20,304,571 15,006,026

Financial liabilitiesLoans and borrowings 45,769,245 39,765,230 44,229,359 38,833,382Other non-current liabilities 638,163 925,024 638,163 925,024Finance lease liabilities 1,186,919 1,305,671 1,186,919 1,305,671Trade and other payables 6,867,882 6,617,757 6,867,882 6,617,757Income tax payable 561,122 505,019 561,122 505,019

The following methods and assumptions were used to estimate the fair values.

• Cashandshort-termdeposits,tradereceivables,tradepayables,andothercurrentliabilitiesapproximatetheircarrying amounts largely due to the short-term maturities of these instruments.

• Long-termfixed-rateandvariable-ratereceivablesareevaluatedbytheGroupbasedonparameterssuchasinterestrates, specific country risk factors, and individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken to account for the expected losses of these receivables. At the end of the reporting period, the carrying amounts of such receivables, net of allowances, approximate their fair values.

• Fairvalueofquotedinvestmentsisbasedonpricequotationsattheendofthereportingperiod.Thefairvalue of unquoted investments, loans from banks and other financial indebtedness, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates applicable for similar risks and maturity profiles. Fair values of unquoted financial assets are estimated using appropriate valuation techniques.

• TheGroupentersintoderivativefinancialinstrumentswithvariouscounterparties,principallyfinancialinstitutionswith investment grade credit ratings. Derivatives valued using valuation techniques with market observable inputs are mainly interest rate swaps, foreign exchange forward contracts and currency swaps. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of counter parties, foreign exchange spot and forward rates and interest rate curves.

Fair value hierarchyThe Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.

Level 1: Quoted prices (unadjusted) prices in active markets for identical assets or liabilities that the Group can access at the measurement date

Level 2: Inputs other than quoted prices included within level 1 that are observable for the assets of liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

136

35 FAIRVALUESOFFINANCIALINSTRUMENTS(CONTINUED)

Fair value hierarchy (continued)

The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:

Financial assets2013

QR’000Level1

QR’000Level2

QR’000Level3

QR’000

Available-for-sale investments 2,641,766 1,098,112 1,543,654 – Derivative financial instruments 138,471 – 138,471 –

2,780,237 1,098,112 1,682,125 –

2012QR’000

Level 1QR’000

Level 2QR’000

Level 3QR’000

Available-for-sale investments 2,487,224 1,180,177 1,307,047 –Derivative financial instruments 30,637 – 30,637 –

2,517,861 1,180,177 1,337,684 –

Financial liabilities2013

QR’000Level1

QR’000Level2

QR’000Level3

QR’000

Derivative financial instruments 22,237 – 22,237 –

2012QR’000

Level 1QR’000

Level 2QR’000

Level 3QR’000

Derivative financial instruments 56,991 – 56,991 –

36 RELATEDPARTYDISCLOSURESRelatedpartytransactionsandbalancesRelated parties represent associated companies including Government and semi Government agencies, associates, major shareholders, directors and key management personnel of the Group, and companies of which they are principal owners. In the ordinary course of business the Group enters into transactions with related parties. Pricing policies and terms of transactions are approved by the Group’s management. The Group enters into commercial transactions with Government related entities in the ordinary course of business in terms of providing telecommunication services, placement of deposits and obtaining credit facilities etc.

a) Transactions with Government and related entitiesThe Group enters into commercial transactions with other Government related entities in the ordinary course of business which includes providing telecommunication services, placement of deposits and obtaining credit facilities. All these transactions are at arm’s length and in the normal course of business.

b) Transactions with Directors and other key management personnel Key management personnel comprise the Board of Directors and key members of management having authority and responsibility of planning, directing and controlling the activities of the Group.

Directors’ remuneration including committee fees of QR 19,480 thousands was proposed for the year ended 31 December 2013 (2012: QR 19,480 thousands). The compensation and benefits related to key management personnel amounted to QR 164,013 thousands (2012: QR 152,921 thousands) and end of service benefits amounted to QR 22,336 thousands (2012: QR 19,521 thousands). The remuneration to the Board of Directors has been included under the caption “employee salaries and associated costs” in Selling, general and administration expenses in note 7.



37 SIGNIFICANTACCOUNTINGJUDGEMENTSANDESTIMATESImpairment of non-financial assetsThe Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and other indefinite life intangibles are tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

Useful lives of property, plant and equipment and investment propertyThe Group’s management determines the estimated useful lives of its property, plant and equipment and investment property for calculating depreciation. This estimate is determined after considering the expected usage of the asset, physical wear and tear, technical or commercial obsolescence.

Useful lives of intangible assetsThe Group’s management determines the estimated useful lives of its intangible assets for calculating amortisation. This estimate is determined after considering the expected usage of the asset, technical or commercial obsolescence.

Classification of investment securitiesOn acquisition of an investment security, the Group decides whether it should be classified as “investments at fair value through consolidated statement of profit or loss” or “available-for-sale”. The Group follows the guidance of IAS 39 on classifying its investments. All investments are classified as “available-for-sale”.

Impairment of available-for-sale equity investmentsThe Group treats available-for-sale equity investments as impaired when there has been a significant or prolonged decline in fair value below its cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires considerable judgment. The Group treats “significant” generally as 20 – 30% or more and ‘prolonged’ greater than nine (9) months. In addition, the Group evaluates other factors, including normal volatility in share price for quoted equities and the future cash flows and the discount factors for unquoted equities.

Fair value of unquoted equity investmentsWhere the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Deferred tax assetsDeferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

Impairment of inventoriesInventories are held at the lower of cost and net realisable value. When inventories become old or obsolete, an estimate is made of their net realisable value. For individually significant amounts, this estimation is performed on an individual basis. Inventories which are not individually significant, but which are old or obsolete, are assessed collectively and a provision applied according to the inventory type and the degree of ageing or obsolescence, based on historical selling prices.

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37 SIGNIFICANTACCOUNTINGJUDGEMENTSANDESTIMATES (CONTINUED)

Impairment of trade receivablesAn estimate of the collectible amount of trade receivables is made when collection of the full amount is no longer probable. For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and a provision applied according to the length of time past due, based on historical recovery rates.

Presentation: gross versus netWhen deciding the most appropriate basis for presenting revenue or costs of revenue, both the legal form and substance of the agreement between the Group and its business partners are reviewed to determine each party’s respective role in the transaction.

Where the Group’s role in a transaction is that of principal, revenue is recognised on a gross basis. This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as an operating cost.

Where the Group’s role in a transaction is that of an agent, revenue is recognised on a net basis with revenue representing the margin earned.

Business combinationsThe recognition of business combinations requires the excess of the purchase price of acquisitions over the net book value of assets acquired to be allocated to the assets and liabilities of the acquired entity.

The Group makes judgements and estimates in relation to the fair value allocation of the purchase price. If any unallocated portion is positive it is recognised as goodwill and if negative, it is recognised in the consolidated statement of profit or loss.

LicencesandspectrumfeesThe estimated useful life is generally the term of the licence unless there is a presumption of renewal at negligible cost. Using the licence term reflects the period over which the Group will receive economic benefit. For technology specific licences with a presumption of renewal at negligible cost, the estimated useful economic life reflects the Group’s expectation of the period over which the Group will continue to receive economic benefit from the licence. The economic lives are periodically reviewed taking into consideration such factors as changes in technology. Historically any changes to economic lives have not been material following these reviews.

Revenuerecognition–fairvaluedeterminationforcustomerloyaltyprogrammesThe Group estimates the fair value of points awarded under the customer loyalty programme estimating the weighted average cost for redemption of the points. Inputs to the models include making assumptions about expected redemption rates, the mix of products that will be available for redemption in the future and customer preferences.

Hedge effectiveness for cash flow hedgesManagement reviews its hedging relationship between the interest rate swaps and the underlying loans on a regular basis. The fair values of the interest rate swaps and basis swaps are determined based on future expected LIBOR rates.



38 SUMMARISEDFINANCIALINFORMATIONOFSUBSIDIARIESWITHMATERIALNON-CONTROLLINGINTERESTSThe following table summarizes the information relating to each of the Group’s subsidiaries that have material non- controlling interests, before any intra-group eliminations:

Asiacel, Iraq

QR’000

Wataniya, Kuwait

QR’000

Ooredoo, AlgeriaQR’000

Ooredoo, Tunisia

QR’000

Indosat, Indonesia

QR’000

Nawras, Oman

QR’000

31 December 2013Non-current assets 7,497,195 13,464,177 5,236,653 2,529,807 14,761,942 2,756,548Current assets 1,531,124 1,396,798 1,755,141 807,228 2,148,818 461,103Non-current liabilities (731,005) (287,856) (1,400,018) (457,638) (7,936,158) (319,984)Current liabilities (2,510,133) (2,455,322) (3,240,244) (1,443,387) (4,014,315) (1,112,603)

Net assets 5,787,181 12,117,797 2,351,532 1,436,010 4,960,287 1,785,064

Carrying amount of NCI 2,079,963 955,449 601,948 228,520 1,914,230 803,279

Revenue 7,070,682 2,481,286 3,883,810 2,504,151 8,371,003 1,990,126Profit/(loss) 1,733,666 179,561 733,393 479,149 (849,760) 313,722

Profit/(loss) allocated to NCI 642,987 14,158 187,735 76,249 (270,301) 141,175

Asiacel, Iraq

QR’000

Wataniya, KuwaitQR’000

Ooredoo, AlgeriaQR’000

Ooredoo, Tunisia

QR’000

Indosat, Indonesia

QR’000

Nawras, Oman

QR’000

31 December 2012Non-current assets 7,290,135 12,793,592 3,809,105 2,654,314 18,546,237 2,397,266Current assets 1,330,025 986,589 1,124,561 1,278,141 3,048,664 528,449Non-current liabilities (729,856) (47,800) (1,532,687) (26,235) (10,299,219) (239,942)Current liabilities (2,253,463) (1,740,612) (1,815,452) (1,226,291) (4,066,770) (981,148)

Net assets 5,636,841 11,991,769 1,585,527 2,679,929 7,228,912 1,704,625

Carrying amount of NCI 2,598,706 945,512 405,865 426,471 2,730,013 767,081

Revenue 6,878,111 2,853,844 3,478,938 2,633,221 8,803,980 1,907,140Profit 1,968,403 590,270 359,000 610,283 218,410 350,068

Profit allocated to NCI 1,108,496 255,922 150,080 353,935 104,344 157,530

140

39 SEGMENTINFORMATIONInformation regarding the Group’s reportable segments is set out below in accordance with “IFRS 8 Operating Segments”. IFRS 8 requires reportable segments to be identified on the basis of internal reports that are regularly reviewed by the Group’s chief operating decision maker (“CODM”) and used to allocate resources to the segments and to assess their performance.

The Group is engaged in a single line of business, being the supply of telecommunications services and related products. The majority of the Group’s revenues, profits and assets relate to its operations in the MENA. Outside of Qatar, the Group operates through its subsidiaries and associates and major operations that are reported to the Group’s CODM are considered by the Group to be reportable segment. Revenue is attributed to reportable segments based on the location of the Group companies. Inter-segment sales are charged at arms’ length prices.

For management reporting purposes, the Group is organised into business units based on their geographical area covered, and has six reportable segments as follows:

1. Ooredoo Qatar (formerly “Qtel”) is a provider of domestic and international telecommunication services within theStateofQatar;

2. AsiacellisaproviderofmobiletelecommunicationservicesinIraq;3. Wataniya is a provider of mobile telecommunication services in Kuwait and elsewhere in the Middle East and NorthAfrican(MENA)region;

4. Indosat is a provider of telecommunication services such as cellular services, fixed telecommunications, multimedia,datacommunicationandinternetservicesinIndonesia;

5. NawrasisaproviderofmobileandfixedtelecommunicationservicesinOman;and6. Others include some of the Group’s subsidiaries which are providers of wireless and telecommunication services.

Management monitors the operating results of its operating subsidiaries separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss of these reportable segments. Transfer pricing between reportable segments are on an arm’s length basis in a manner similar to transactions with third parties.



39 SEGMENTINFORMATION(CONTINUED)

Operating segments The following tables’ present revenue and profit information regarding the Group’s operating segments for the year ended 31 December 2013 and 2012:

Year ended 31 December 2013Ooredoo

QatarQR’000

AsiacellQR’000

WataniyaQR’000

IndosatQR’000

NawrasQR’000

OthersQR’000

Adjustments and eliminations

QR’000Total

QR’000

RevenueThird party 6,527,293 7,044,480 9,286,904 8,328,871 1,981,430 682,362 – 33,851,340Inter-segment 62,695 26,202 91,496 42,132 8,696 103,415 (334,636) (i) –

Total revenue 6,589,988 7,070,682 9,378,400 8,371,003 1,990,126 785,777 (334,636) 33,851,340

ResultsSegment profit/(loss) before tax 1,501,318 2,423,173 1,884,378 (1,077,590) 412,527 (703,075) (545,585) (ii) 3,895,146

Depreciation and amortisation 712,942 1,047,103 1,604,857 3,275,197 374,088 103,077 545,585 (iii) 7,662,849

Net finance costs 1,125,479 17,480 69,158 794,428 20,430 (6,093) – 2,020,882


QatarQR’000

AsiacellQR’000

WataniyaQR’000

IndosatQR’000

NawrasQR’000

OthersQR’000


QR’000Total

QR’000


Total revenue 6,220,097 6,878,111 9,444,872 8,803,980 1,907,140 677,029 (455,620) 33,475,609

ResultsSegment profit/(loss) before tax 1,711,049 2,493,623 1,988,343 235,235 454,060 (330,562) (739,068) (ii) 5,812,680

Depreciation and amortisation 681,992 942,979 1,540,649 3,339,677 310,240 106,771 690,149 (iii) 7,612,457

Net finance costs 933,175 49,499 60,916 887,368 12,795 (22,747) – 1,921,006

142

39 SEGMENTINFORMATION(CONTINUED)

Operating segments The following tables’ present revenue and profit information regarding the Group’s operating segments for the year ended 31 December 2013 and 2012:


QatarQR’000

AsiacellQR’000

WataniyaQR’000

IndosatQR’000

NawrasQR’000

OthersQR’000


QR’000Total

QR’000


Total revenue 6,589,988 7,070,682 9,378,400 8,371,003 1,990,126 785,777 (334,636) 33,851,340

ResultsSegment profit/(loss) before tax 1,501,318 2,423,173 1,884,378 (1,077,590) 412,527 (703,075) (545,585) (ii) 3,895,146

Depreciation and amortisation 712,942 1,047,103 1,604,857 3,275,197 374,088 103,077 545,585 (iii) 7,662,849

Net finance costs 1,125,479 17,480 69,158 794,428 20,430 (6,093) – 2,020,882


QatarQR’000

AsiacellQR’000

WataniyaQR’000

IndosatQR’000

NawrasQR’000

OthersQR’000


QR’000Total

QR’000


Total revenue 6,220,097 6,878,111 9,444,872 8,803,980 1,907,140 677,029 (455,620) 33,475,609

ResultsSegment profit/(loss) before tax 1,711,049 2,493,623 1,988,343 235,235 454,060 (330,562) (739,068) (ii) 5,812,680

Depreciation and amortisation 681,992 942,979 1,540,649 3,339,677 310,240 106,771 690,149 (iii) 7,612,457

Net finance costs 933,175 49,499 60,916 887,368 12,795 (22,747) – 1,921,006

(i) Inter-segment revenues are eliminated on consolidation. (ii) Segment profit before tax does not include the following:

2013QR’000

2012QR’000

Amortization of intangibles (545,585) (690,149)Impairment of intangibles – (48,919)

(545,585) (739,068)

(iii) Amortisation relating to additional intangibles identified from business combination was not considered as part of segment expense.

The following table presents segment assets of the Group’s operating segments as at 31 December 2013 and 2012.

Ooredoo Qatar

QR’000AsiacellQR’000

WataniyaQR’000

IndosatQR’000

NawrasQR’000

OthersQR’000


QR’000Total

QR’000

Segment assets (i)At 31 December 2013 24,493,227 8,857,432 27,743,561 18,201,410 3,217,092 3,734,715 11,168,218 97,415,655

At 31 December 2012 (Restated) 18,192,813 8,432,088 25,917,717 23,278,311 2,924,356 3,127,418 12,332,621 94,205,324

Capital expenditure (ii)At 31 December 2013 830,876 1,339,812 4,030,160 2,787,936 736,826 66,054 – 9,791,664

At 31 December 2012 764,022 815,869 2,447,310 3,568,059 585,134 76,717 – 8,257,111

(i) Goodwill amounting to QR 11,168,218 thousands (31 December 2012: QR 12,332,621 thousands) was not considered as part of segment assets as goodwill is not used by the Chief Decision Making officers for strategic decision making purposes.

(ii) Capital expenditure consists of additions to property, plant and equipment and intangibles excluding goodwill and assets from business combinations.

Ooredoo Annual Report 2013

143


40 CONTRIBUTIONTOSOCIALANDSPORTSFUNDAccording to Qatari Law No. 13 for the year 2008 and the related clarifications issued in January 2010, the group is required to contribute 2.5% of its annual net profits to the state social and sports fund. The clarification relating to Law No. 13 requires the payable amount to be recognised as a distribution of income. Hence, this is recognised in statement of changes in equity.

During the year, the Group appropriated an amount of QR 34,238 thousands (2012: QR 38,119 thousands) representing 2.5% of the net profit generated from Qatar Operations.

41 DISCONTINUEDOPERATIONIn December 2012, one of the Group’s subsidiaries wi-tribe Limited – Jordan P.S.C.(“Jordan”) ceased its operations and accordingly this had been classified as a discontinued operation in accordance with IFRS 5.

As of 31 December 2013, the management of the Group has committed to a plan to sell all the equity interest in one of the Group’s subsidiaries, Public Telecommunications Company Ltd. (“PTC”). As at 31 December 2013, final negotiations for the sale were in progress. As a result, PTC has been reclassified as a disposal group held for sale and disclosed as a discontinued operation as per IFRS 5.

The consolidated statement of profit or loss and statement of cash flow for the comparative year have been represented to disclose the discontinued operation separately from continuing operations.

Resultsofdiscontinuedoperations2013

JordonQR’000

2013PTC

QR’000

2013Total

QR’0002012

QR’000

Revenue – 237,927 237,927 238,602Operating expenses 855 (45,874) (45,019) (145,663)Selling, general and administrative expenses 49 (96,064) (96,015) (107,779)Depreciation and amortization (46) (87,937) (87,983) (89,738)Net finance costs (203) 57 (146) 48Other income (expense) – net 805 9,466 10,271 3,516Royalties and fees – (7,891) (7,891) (11,855)

Results from operating activities 1,460 9,684 11,144 (112,869)Loss on sale of a discontinued operation (1,071) – (1,071) – Results from operating activities – Jordon – – – (68,169)

Profit/(loss) for the year 389 9,684 10,073 (181,038)

In May 2013, the Group disposed wi-tribe Limited – Jordan P.S.C. for a net consideration of QR 510 thousands and derecognised net assets amounting to QR 1,581 thousands on the date of disposal. As a result, the Group has recognized a loss of QR 1,071 thousands on disposal of this subsidiary.

Cash flows from (used in) discontinued operations2013

QR’0002012

QR’000

Net cash from/(used in) operating activities 123,236 (2,595)Net cash used in investing activities (5,745) (8,881)Net cash from financing activities – 68,291

Net cash flows for the year 117,491 56,815

144

41 DISCONTINUEDOPERATION(CONTINUED)

Financial position of discontinued operation2013

QR’0002012

QR’000

AssetsProperty, plant and equipment 4,958 513 Intangible assets 103,282 – Inventories 6,036 – Trade and other receivables 62,759 1,148Cash and cash equivalents 199,661 4,843

376,696 6,504Less: Assets of subsidiary disposed (1,560) –

Assets held for distribution 375,136 6,504LiabilitiesEmployees benefits (13,408) – Other non-current liabilities (40,418) – Trade and other payables (425,092) (30,882)Deferred income (21,364) (5,776)

(500,282) (36,658)Less: Liabilities of subsidiary disposed (21) –

Liabilities held for distribution (500,303) (36,658)

Net liabilities (125,167) (30,154)

42 COMPARATIVEINFORMATION(i) Restatement of comparative informationRestatement on account of revision to “IAS 19 – Employee Benefits”The Group has adopted the amendments to “IAS 19 – Employee Benefits” from 1 January 2013 with retrospective effect. Previously, the Group used to recognise actuarial gains and losses on a deferred basis under the corridor method on their defined benefit plans (allowed under IAS 19 before amendments).

As a result of new amendment, previously deferred actuarial gains and losses pertaining to defined benefit plans of one of the Group’s subsidiaries PT Indosat Tbk have been recognized through other comprehensive income. Accordingly, the previously reported numbers for 2012 have been restated as follows:

NoteAs reported

QR’000Restatement impact

QR’000As restated

QR’000

Consolidated financial statementsOther non-current assets 936,991 (28,831) 908,160Deferred tax assets 69,455 5,126 74,581Employee benefit reserve (a) – (110,958) (110,958)Retained earnings (a) 9,585,735 10,756 9,596,491Non-controlling interests (a) 8,999,618 (57,832) 8,941,786Employees benefits 746,503 181,882 928,385Deferred tax liabilities 1,417,689 (47,553) 1,370,136

(a) These numbers have been retrospectively restated for all prior periods.



42 COMPARATIVEINFORMATION(CONTINUED)

(i) Restatement of comparative information (continued)

Restatement on account of reclassification of property, plant and equipment to investment propertyDuring the year, the Group has reassessed usage of its head quarter building for both the years 2012 and 2013 since a portion of the building is being rented to an external party. In accordance with the criteria under IAS 40 “Investment property”, the management has reclassified net book value amounting to QR 66,459 thousands from property, plant and equipment to investment property.

Accordingly, the previously reported numbers of property, plant and equipment for 2012 have been restated and reclassified to investment property. However, such reclassification does not result in any change in total non-current assets reported in 2012. The management has adopted the “cost model” under IAS 40 to account for its investment property and there is no change in accounting treatment and method of depreciation previously used while it was treated as property, plant and equipment with an exception of separate presentation in the financial statements.

Restatement on account of acquisition of non-controlling interestIn September 2013, net assets of Tunisia pertaining to December 2012 acquisition of 15% non-controlling interest in Tunisiana S.A was adjusted from QR 3,274,142 thousands to QR 2,840,027 thousands. As a result, the excess of cash consideration over carrying values of net assets acquired of QR 819,820 thousands ,originally charged to retained earnings, has been restated by adjusting retained earnings downwards and non-controlling interests upwards by QR 65,117 thousands in order to reflect the correct position at the time of acquisition of non-controlling interests in December 2012.

Restatement on account of disposal of non-controlling interestIn 2013, net assets pertaining to the earlier disposal of an effective 0.55% stake in Nawras (one of the Group’s subsidiaries) through an initial public offering (“IPO”) was adjusted by QR 88,869 thousands. As a result, the excess of IPO proceeds received over the carrying value of net assets disposed previously credited to retained earnings has been restated by adjusting retained earnings downwards and non-controlling interest upwards by QR 88,869 thousands to reflect the correct position of the disposal of stake.

(ii) Reclassification of comparative informationCorresponding figures for 2012 have been reclassified in order to conform with the presentation for the current year. Such reclassifications were made to improve the quality of presentation and do not affect previously reported profit or shareholder’s equity.

43 EVENTSAFTERTHEREPORTINGDATEDisposal of PTCOn 31st January 2014, the Group completed the legal formalities relating to the disposal of one of its subsidiaries PTC. In 2013 PTC has been reflected as a discontinued operation as explained further in note 41. With this disposal, PTC is no longer subsidiary of the Group and will be derecognised in 2014.

MyanmarLicenseOne of the subsidiaries of the Group, Ooredoo Myanmar Limited (OML) was awarded a 15 year nationwide telecommunication license and associated spectrum license by Myanmar Post and Telecommunications Department, Ministry of Information and Technology with an effective date of 5 February 2014.

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Annual Report 2013 - Ooredoo · Ooredoo Annual Report 2013 3. Chairman’s Message Dear Shareholders, Our industry is going through a period of rapid change and evolution. The digital